Bucharest Stock Exchange
Encyclopedia
The Bucharest Stock Exchange (Bursa de Valori Bucureşti in Romanian
) is a stock exchange
in Bucharest
, capital of Romania
. On December 1, 2005, Bucharest's electronic over-the-counter
stock market, Rasdaq, was merged with the Bucharest Stock Exchange.
The total capitalisation of the Bucharest Stock Exchange is around 29 bn $ and the capitalisation of Rasdaq is around 4 bn$ (5 May 2010).
The exchange has pre-market sessions from 09:30am to 10:00am and normal trading sessions from 10:00am to 4:30pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance.
. It was regulated by the "Law on exchanges, securities
and commodities
brokers" ("Legea asupra Burselor, Mijlocitorilor de Schimb şi Mijlocitorilor de Mărfuri") passed one year earlier. There were 21 securities quoted (6 stock
s and 15 commercial paper
issues) and it was also used for trading commodities. In 1904 a new "Law on commercial exchanges" ("Legea asupra burselor de comerţ") was passed. Among other things, the new law separated securities trading from commodities trading and introduced a Clearing house
, which improved investor confidence. The number of quoted securities also increased to 43 (21 stocks and 22 commercial papers).
Market activity was relatively low until 1916 when, due to Romania's entering World War I
, trading was suspended altogether. The exchange was reopened after the war and trading and market capitalization
increased rapidly based on the setting of many new companies and strong investor demand for securities. Strong growth was driven first by transportation and banking stocks and, after 1925, by speculation
with oil companies' stocks (oil stocks accounted for over 75% of market turnover
).
After an extended period of strong growth, stock prices fell sharply with the start of the 1929 Great Depression
, reaching their lowest historical level in 1932. Beginning with 1933, the exchange started to recover, with prices and trading volume reaching the highest level in interbellum history in 1939. The exchange continued trading through World War II
and market turnover even increased. In 1945, after the communist regime
seized power, the Bucharest Exchange, as a capitalist institution, was closed and securities trading disappeared for the following 50 years.
, the exchange became necessary again. The Bucharest Stock Exchange was reopened on 21 April 1995 in the building of the National Bank of Romania. The exchange started trading in November, with only 9 quoted stocks and weekly trading sessions. In the first year, there was scarcely any activity. Trading started to increase in 1997, when the number of quoted stocks increased to 76, and volume and prices increased rapidly in the first half of the year. However, this rapid growth was followed in the second half of the year by a strong bear market, due to some contagion effect from the East Asian financial crisis
as well as to domestic problems. The newly introduced BET
index fell 24% in the last three months of 1997 and a further 50% in 1998.
In 1998 listed stocks were separated in two tiers
, the exchange introduced daily trading and the National Bank of Romania became the settlement bank. In trying to improve investor confidence, in 1999 the exchange delisted many companies which had various problems, although it allowed their stocks to continue to be traded using its mechanisms. However, market evolution was mixed until 2001.
The exchange turned to a bull market in 2001, strong growth in capitalisation, trading volume and stock prices lasting up to the present. In the next years, stock prices soared, registering record increases. In 2002, BET index increased by 117.5% and, according to Financial Times
, BSE has grown fastest among world exchanges that year.
New instruments were introduced by a management of Vienna Stock Exchange in 2001 with a new listing structure and listing of the first municipal bond
s. However, Bond
trading has been very thin until now, partly because of repeated postponing of the listing of government bond
s.
On 14 February 2008, the first foreign company is listed: Erste Bank der oesterreichischen Sparkassen AG (Erste Bank) having the symbol EBS.
, now part of the Bucharest Stock Exchange. The RASDAQ was one of two stock exchange
s in Romania but merged with the Bucharest Stock Exchange on December 8, 2005. The name of the RASDAQ derived from NASDAQ
, second largest stock exchange in United States
, because the RASDAQ was modelled on the NASDAQ
. The main index of the RASDAQ was "RASDAQ-C".
:
Romanian language
Romanian Romanian Romanian (or Daco-Romanian; obsolete spellings Rumanian, Roumanian; self-designation: română, limba română ("the Romanian language") or românește (lit. "in Romanian") is a Romance language spoken by around 24 to 28 million people, primarily in Romania and Moldova...
) is a stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
in Bucharest
Bucharest
Bucharest is the capital municipality, cultural, industrial, and financial centre of Romania. It is the largest city in Romania, located in the southeast of the country, at , and lies on the banks of the Dâmbovița River....
, capital of Romania
Romania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
. On December 1, 2005, Bucharest's electronic over-the-counter
Over-the-counter (finance)
Within the derivatives markets, many products are traded through exchanges. An exchange has the benefit of facilitating liquidity and also mitigates all credit risk concerning the default of a member of the exchange. Products traded on the exchange must be well standardised to transparent trading....
stock market, Rasdaq, was merged with the Bucharest Stock Exchange.
The total capitalisation of the Bucharest Stock Exchange is around 29 bn $ and the capitalisation of Rasdaq is around 4 bn$ (5 May 2010).
The exchange has pre-market sessions from 09:30am to 10:00am and normal trading sessions from 10:00am to 4:30pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance.
Pre-World War II
The Bucharest Exchange opened on 1 December 1882 in the building of the Chamber of Commerce in BucharestBucharest
Bucharest is the capital municipality, cultural, industrial, and financial centre of Romania. It is the largest city in Romania, located in the southeast of the country, at , and lies on the banks of the Dâmbovița River....
. It was regulated by the "Law on exchanges, securities
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...
and commodities
Commodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
brokers" ("Legea asupra Burselor, Mijlocitorilor de Schimb şi Mijlocitorilor de Mărfuri") passed one year earlier. There were 21 securities quoted (6 stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
s and 15 commercial paper
Commercial paper
In the global money market, commercial paper is an unsecured promissory note with a fixed maturity of 1 to 270 days. Commercial Paper is a money-market security issued by large banks and corporations to get money to meet short term debt obligations , and is only backed by an issuing bank or...
issues) and it was also used for trading commodities. In 1904 a new "Law on commercial exchanges" ("Legea asupra burselor de comerţ") was passed. Among other things, the new law separated securities trading from commodities trading and introduced a Clearing house
Clearing house (finance)
A clearing house is a financial institution that provides clearing and settlement services for financial and commodities derivatives and securities transactions...
, which improved investor confidence. The number of quoted securities also increased to 43 (21 stocks and 22 commercial papers).
Market activity was relatively low until 1916 when, due to Romania's entering World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
, trading was suspended altogether. The exchange was reopened after the war and trading and market capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
increased rapidly based on the setting of many new companies and strong investor demand for securities. Strong growth was driven first by transportation and banking stocks and, after 1925, by speculation
Speculation
In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum...
with oil companies' stocks (oil stocks accounted for over 75% of market turnover
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
).
After an extended period of strong growth, stock prices fell sharply with the start of the 1929 Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
, reaching their lowest historical level in 1932. Beginning with 1933, the exchange started to recover, with prices and trading volume reaching the highest level in interbellum history in 1939. The exchange continued trading through World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
and market turnover even increased. In 1945, after the communist regime
Communist Romania
Communist Romania was the period in Romanian history when that country was a Soviet-aligned communist state in the Eastern Bloc, with the dominant role of Romanian Communist Party enshrined in its successive constitutions...
seized power, the Bucharest Exchange, as a capitalist institution, was closed and securities trading disappeared for the following 50 years.
Post-Communist
After the Romanian Revolution of 1989Romanian Revolution of 1989
The Romanian Revolution of 1989 was a series of riots and clashes in December 1989. These were part of the Revolutions of 1989 that occurred in several Warsaw Pact countries...
, the exchange became necessary again. The Bucharest Stock Exchange was reopened on 21 April 1995 in the building of the National Bank of Romania. The exchange started trading in November, with only 9 quoted stocks and weekly trading sessions. In the first year, there was scarcely any activity. Trading started to increase in 1997, when the number of quoted stocks increased to 76, and volume and prices increased rapidly in the first half of the year. However, this rapid growth was followed in the second half of the year by a strong bear market, due to some contagion effect from the East Asian financial crisis
East Asian financial crisis
The Asian financial crisis was a period of financial crisis that gripped much of Asia beginning in July 1997, and raised fears of a worldwide economic meltdown due to financial contagion....
as well as to domestic problems. The newly introduced BET
BET-10
The Bucharest Exchange Trading index is an index of 10 stocks that trade on the Bucharest Stock Exchange. It was launched on 19 September 1997 with a value of 1,000.00....
index fell 24% in the last three months of 1997 and a further 50% in 1998.
In 1998 listed stocks were separated in two tiers
Tiers
Tiers, also known as Ultra Checkers, is a complex variant of checkers that allows players to upgrade their pieces beyond kings. It is played on a standard eight by eight checkers board with two opposing players...
, the exchange introduced daily trading and the National Bank of Romania became the settlement bank. In trying to improve investor confidence, in 1999 the exchange delisted many companies which had various problems, although it allowed their stocks to continue to be traded using its mechanisms. However, market evolution was mixed until 2001.
The exchange turned to a bull market in 2001, strong growth in capitalisation, trading volume and stock prices lasting up to the present. In the next years, stock prices soared, registering record increases. In 2002, BET index increased by 117.5% and, according to Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
, BSE has grown fastest among world exchanges that year.
New instruments were introduced by a management of Vienna Stock Exchange in 2001 with a new listing structure and listing of the first municipal bond
Municipal bond
A municipal bond is a bond issued by a city or other local government, or their agencies. Potential issuers of municipal bonds includes cities, counties, redevelopment agencies, special-purpose districts, school districts, public utility districts, publicly owned airports and seaports, and any...
s. However, Bond
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
trading has been very thin until now, partly because of repeated postponing of the listing of government bond
Government bond
A government bond is a bond issued by a national government denominated in the country's own currency. Bonds are debt investments whereby an investor loans a certain amount of money, for a certain amount of time, with a certain interest rate, to a company or country...
s.
On 14 February 2008, the first foreign company is listed: Erste Bank der oesterreichischen Sparkassen AG (Erste Bank) having the symbol EBS.
RASDAQ
RASDAQ is a former stock market in RomaniaRomania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
, now part of the Bucharest Stock Exchange. The RASDAQ was one of two stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
s in Romania but merged with the Bucharest Stock Exchange on December 8, 2005. The name of the RASDAQ derived from NASDAQ
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
, second largest stock exchange in United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, because the RASDAQ was modelled on the NASDAQ
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
. The main index of the RASDAQ was "RASDAQ-C".
Indices
Bucharest Stock Exchange has six indicesIndex (economics)
In economics and finance, an index is a statistical measure of changes in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and employment. Economic indices track economic health from...
:
- BETBET-10The Bucharest Exchange Trading index is an index of 10 stocks that trade on the Bucharest Stock Exchange. It was launched on 19 September 1997 with a value of 1,000.00....
, which was created first, reflects the evolution of the most liquid 10 stocks (except Investment Funds); it is the most followed index of the exchange - BET-C (BET Composite) reflects the evolution of all listed stocks (except Investment Funds)
- BET-FI reflects the evolution of the five large Investment Funds created in the Mass Privatisation Program
- ROTX (Romanian Traded Index) reflects the evolution of the most liquid blue chips
- BET-XT (BUCHAREST EXCHANGE TRADING EXTENDED INDEX) reflect the evolution of the most liquid 25 stocks, including the 5 Investment Funds created in the Mass Privatisation Program.
- BET-NG (BUCHAREST EXCHANGE TRADING ENERGY & RELATED UTILITIES INDEX) energetic sector index on Bucharest Stock Exchange
Largest stocks by market value
Source:http://www.bvb.ro/, in millions of $ in 5 May 2010- Erste BankErste GroupErste Group Bank AG is one of the largest financial services providers in Central and Eastern Europe and focuses on retail and SME banking. More than 50,000 employees are serving clients in over 3,000 branches in 8 countries .Erste Group was founded in 1819 as the first Austrian savings bank...
- US$ 15.365 - PetromPetromPetrom is a Romanian oil company, the largest corporation in Romania and the largest gas and oil producer in Eastern Europe operating in several countries:*Romania - largest company;*Moldova - 2nd largest company, 31% market share;...
- US$ 5.314 - BRD-Societe GeneraleBRD - Groupe Société GénéraleBRD – Groupe Société Générale , is a Romanian bank in which the French Société Générale financial group holds a majority stake of 59.37%. It was rebranded after SG bought Banca Română pentru Dezvoltare from the Romanian State in 1999. It is currently the second largest bank by assets in Romania...
- US$ 3.051 - TransgazTransgazTransgaz , is a state-owned company, which is the technical operator of the national natural gas transmission system in Romania. The company handled in 2006 a quantity of 15.85 billion m³ of natural gas....
- US$ 806 - Alro SlatinaAlro SlatinaAlro SA , established in 1963, is one of the biggest aluminium companies in Romania and in Europe. It started operation in 1965. Alro's primary aluminium facilities are located in Slatina and currently comprise a smelter and processing facilities, including a cast house, hot and cold rolling mills...
- US$ 676 - Banca TransilvaniaBanca TransilvaniaBanca Transilvania , a bank corporation in Romania, was founded December 1993 in Cluj-Napoca by several local businessmen, with an initial capitalization of 2 billion Romanian lei ; initial capitalization was 79% Romanian and 21% foreign.The bank first opened for business February 16, 1994, with...
- US$ 662 - Rompetrol RafinareRompetrolThe Rompetrol Group N.V. , is a Romanian oil company, that operates in many countries throughout Europe:unclear what "market share": refining? downstream? extraction? well services?*Romania - 2nd largest oil company, 40% market share...
- US$ 459 - TranselectricaTranselectricaTranselectrica , is a joint - stock 100% state-owned company, its shares being held by the Ministry of Economy and Commerce. August 26th2006 marks the public listing of 10% of the company's shares on the Bucharest Stock Exchange ....
- US$ 394 - SIF 5 Oltenia - US$ 310
- SIF 3 Transylvania - US$ 230
- SIF 1 Banat-Crisana - US$ 224
- SIF 2 Moldova - US$ 194
- SIF 4 Muntenia - US$ 186
- Banca Comercială Carpatica - US$ 182
- Antibiotice IaşiAntibiotice IasiAntibiotice Iaşi , is a state-owned pharmaceutical company which is the third largest drug producing company in Romania and the second largest nystatin producer in the world. Its research center and production facilities are based in Valea Lupului, a commune near Iaşi.-External links:* * *...
- US$ 87 - TMK-Artrom SlatinaOAO TMKOAO "TMK" is one of the world's leading producers of steel pipes for the oil and gas sector...
- US$ 80 - Biofarm - US$ 62
- Mechel TargovisteMechelMechel is one of Russia’s leading mining and metallurgical companies, producing coal, iron ore, nickel steel, rolled steel products, hardware, heat and electric power. Headquartered in Moscow, the company operates facilities in Russia, Romania, Lithuania, Kazakhstan, Bulgaria, and the United...
- US$ 60 - Impact Bucureşti - US$ 38
- Turism Felix - US$ 32