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Saturday, December 16, 2017 
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Foreign investors upshift perception on Romania from good to great in just a few years time

8/9/2017

  • Renaissance Capital: A greater number of investors compared to two years ago are now aware of the market and trade Romania. We have also seen increased interest from our clients in getting educated about Romania
  • Berenberg: The share price performance of Romanian listed companies has been outstanding, as witnessed by the MSCI’s Romania Total Return index which jumped more than 150% over the last 5 years in USD terms

 

Foreign investors have greatly upshifted perception on Romania’s equity market, which is on the edge to be upgraded to Emerging Market status. "The share price performance of Romanian listed companies has been outstanding, as witnessed by the MSCI’s Romania Total Return index which jumped more than 150% over the last 5 years in USD terms. Thanks to a very strong economic recovery and a booming private pension fund system more and more companies started to list on the BVB," said Carsten Hesse, EME Equity Strategist at the German investment bank Berenberg.

Renaissance Capital, a leading emerging markets investment bank, London-based brokerage company, shares a similar opinion. "Romania’s market has been one of the strongest performers year to date. A greater number of investors compared to two years ago are now aware of the market and trade Romania. We have also seen increased interest from our clients in getting educated about Romania in the past 12 months. The growing activity on the stock market comes from a going forward, healthy economic growth and dividend yields above the average for the region," said Mark Reed, Global Head of Sales Trading at Renaissance Capital.

"The interest of international investors in Romanian stock listed companies has increased dramatically in particular towards the banking sector and Fondul Proprietatea which can also be witnessed in the trading volumes that have more than doubled since 2012. The recent IPOs, MedLife and DIGI, and larger capital market transactions have been very successful which is not surprising to us as investors are very keen on profiting from the strong economic growth outlook via investing in Romanian companies," Hesse explained.

"Regulation has improved (e.g. how dividends are being distributed) and red tape was cut to improve the speed and cut the burden to open a trading account for foreign institutional investor. Hopefully more capital market transaction will follow shortly to keep the strong momentum and interest by international investors into the Romanian equity market," Berenberg’s strategist concluded.