Local capital market must be supported by the Romanian authorities and government, in the Brexit context, believes Ludwik Sobolewski, General Director of the Bucharest Stock Exchange. He appreciates that having Romanian companies listed on foreign markets does not make sense. In an article published by www.bursa.ro, Ludwik Sobolewski also said: “It is important for Romania to strengthen its institutions. Nobody can do the job for Romania. The capital market must be supported by the authorities and the government. And verbal support is not enough, it is the facts that matters. In this context, I hope a strategy will be more visible, because it is nonsensical to develop other markets through dual listings”.
According to BSE’s General Director, quoted by Bursa, listings of local companies in other markets have made sense once, when accessing foreign investors was most needed. “But for already listed companies, as Petrom, a listing in London has absolutely no sense,” Mr. Sobolewski said. “We also agreed that it is also necessary for Romgaz and Electrica to be listed in London, but for the Fondul Proprietatea we saw no reason whatsoever”.
The disadvantages of dual listing have already been visible following the referendum in United Kingdom, when the liquidity of Romanian companies listed there was lower than in Bucharest, however volatility was higher. “The companies lost more value in London than in Bucharest. The price exposure mechanism works better where liquidity is higher. Unfortunately, secondary listings have led to the fragmentation of liquidity for Romanian issuers,” the head of the Bucharest Stock Exchange added.
His comments come soon after Hidroelectrica exited insolvency, opening the way for the first major IPO in years on the Bucharest Stock Exchange.
