EUROPE’S BIGGEST COMPANIES

SEE stock exchanges market capitalisation
as of 31.12.2014, in billions of euro
23.73
LJSE
26.38
ZSE
proving economic environment will add fuel
to the engine. Unless of course the global
economic picture changes drastically due to
slow growth in China or any geopolitical escalation.
The numbers in the past
2.27 2.45
BLSE SASE
2.96
Zagreb Stock Exchange (ZSE)
Ljubljana Stock Exchange (LJSE)
Bucharest Stock Exchange (BVB)
Belgrade Stock Exchange (BELEX)
Bulgarian Stock Exchange (BSE)
Montenegro Stock Exchange (MNSE)
Sarajevo Stock Exchange (SASE)
Macedonian Stock Exchange (MSE)
Banja Luka Stock Exchange (BLSE)
MNSE
Over the last three years the major capital
markets in SEE were moving pretty much in
a pack. The main indexes in Romania, Bulgaria,
Slovenia and Serbia аll advanced between
45% and 50% over that period. Croatia
was the only laggard with slightly over 5%
growth.
The overriding theme over this past threeyear
horizon was the recovery from the crisis.
The conflict in Russia and Ukraine, however,
added significant pressure on the fundamentals
at the end of 2014 and the beginning of
2015, as the two countries are an important
export markets for many SEE companies. Consequently,
this was reflected in the market
valuations. Year-to-date (data as of August 19,
2015), the blue-chip SOFIX index of the bourse
in Sofia was losing 10% of its value, followed
by the SBITOP of the Ljubljana stock exchange
with 6% decline. The BELEX15 of the Belgrade
bourse was slightly below zero, while the
CROBEX of the Zagreb bourse and the BET of
the Bucharest stock exchange were offering
gains of 3.1% and 6%, respectively. All markets
6.47
BELEX
1.81
MSE
28 .9
BVB
4.99
BSE
were basically in a consolidation mode over
the past year, with Russia and Ukraine as one
of the reasons behind the lack of a strong upward
or downward trend.
Romania - the flagship
of state listings
The Romanian market has been the outperformer
and ”the market of first choice” for
most global frontier investors over the past
few years, largely thanks to the Romanian
government’s efforts to that end. The government
raised millions of euro via the privatisation
of state companies through the
stock exchange, in line with its agreement
with the International Monetary Fund. It also
attracted a global emerging markets expert,
Franklin Templeton, to run one of its most
undervalued assets - Fondul Proprietatea. Big
names attract more big names. Thus, Fondul
Proprietatea has been on investors' radars
during the last couple of years. Surely, part of
the upside there has already been consumed.
Nevertheless, it is a door opener for more investors
to come in Romania and in the region
and for more companies to raise funding for
growth.
Fondul Proprietatea, alongside other big
Romanian companies, has debuted on the
London Stock Exchange to get additional visibility.
TOP 100 listed
companies
A few more big listings in Bucharest and
some further work on the stock market infrastructure,
and Romania may end up being
upgraded from an MSCI Frontier to an MSCI
Emerging market ranking, which would increase
significantly its visibility. This upgrade,
projected to happen in 2016, has been on the
local institutions' agenda for a year now and
investors have started pricing it in. Nevertheless,
if it becomes a fact, it will be a huge step
forth not only for Romania, but for the whole
region.
Bulgaria - the private
listings flagship
Expected new state listings in Bucharest will
keep the market hot for both global and regional
investors. However, once state support
for the Romanian stock market diminishes,
which is bound to happen at some point, it
will have to start generating interest on its
own - something the Bulgarian capital market
has been struggling to do for years now.
The end of 2015 and the beginning of 2016,
however, may bring in a game changer as one
of the biggest software developing groups
in the country - Sirma group holding - will be
debuting on the Bulgarian stock exchange in
the autumn of 2015. Sirma’s IPO has been one
of the most anticipated events on the market
in 2015 both as an investment opportunity
in one of the fastest growing industries and
as an incentive for other IT, fast growing and
good corporate governance companies to
list. It is also a fairly large IPO, with an expected
26.4 million levs to be raised, tapping the
markets' ability to fund well-run and growing
businesses – indications of which have been
visible in other smaller listings on the Sofia
bourse over the last two years.
In 2013, a start-up leasing company - Elana
Agrocredit - debuted on the market. Initially, it
raised some 5 million levs from local pension
funds and sophisticated investors and in the
spring of 2015 it tripled its capital by raising
a further 14 million levs. In 2014, the biggest
courier company in Bulgaria – Speedy - raised
fresh 20 million levs via both the market and
a strategic investor, proving that investors'
appetite is strong for companies with good
corporate governance, lean expansion strategy
and transparent and well seasoned management.
45