Romanian capital market

Why Romania’s capital market is going through one of the best periods in its history

The offer of state-backed Romanian power producer Hidroelectrica (H2O) which was held at the Bucharest Stock Exchange (BVB) between June 23 and July 4, 2023, ended successfully and became the largest initial public offering (IPO) ever made on the Romanian stock market.

Hidrolectrica’s IPO which had been under discussion for over a decade, attracted a total of RON 9.28 billion (about EUR 1.9 billion EUR or USD 2.1 billion) for 89.7 million shares representing 19.94% of the total number of shares and became the largest IPO in Europe and the third largest in the world considering the IPOs so far this year. Hidroelectrica debuted on July 12th on the BVB’s Regulated Market and is the largest Romanian company listed on the BVB in terms of market capitalization.

Hidroelectrica’s IPO also recorded a series of all-time highs for the segment related to retail investors. Thus, during the offer, the highest value subscribed by retail investors to an IPO at BVB was registered: RON 6.3 billion at the Hidroelectrica IPO. Also within the H2O offer, the highest value of transactions resulting from an offer in the retail segment was recorded: RON 1.82 billion, as well as the highest number of orders subscribed in the retail segment at an IPO in Romania: 51,865 orders. After H2O entered trading at the BVB, another record was set on July 12th: the most transactions made in one day on the equity segment, the Regulated Market and the Multilateral Trading System, without offers: 23,358 transactions.

The number of investors in the Romanian capital market continued to grow and reached almost 160,000 investors at the end of the first semester of 2023, according to data from the Investor Compensation Fund (FCI).

(Source: Bucharest Stock Exchange-BVB)

By comparison, in 2019 there were almost 54,000 investors. This represents a 200% increase over the past five years. Moreover, once the threshold of 150,000 investors was exceeded, the capital market in Romania reached a new all-time high.

The Romanian capital market grew by 17.5% in the first seven months of this year, according to the BET-TR index, which also includes dividends. At the end of the trading session on July 31st, BET-TR showed a level of 26,647 points, and the all-time high reached since its establishment 11 years ago was recorded on July 20, 2023, when BET-TR reached 26,765 points. Also during this time, BET-NG, the index of energy and utilities companies, was up 16.9%.

A new record was registered regarding the capitalization of Romanian companies and the highest recorded value for this indicator was posted on July 20, 2023. On that date, the market value of all Romanian companies listed on the BVB reached a level of RON 202.1 billion, equivalent to EUR 40.9 billion.