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The Romanian capital market becomes an emerging market

10/12/2020

For the first time in history, the Romanian capital market has been included since September 21, 2020 in the Emerging Markets indices, according to the classification of the global index provider FTSE Russell.

The promotion of Romania to the Emerging Market status 25 years after the re-establishment of the local stock exchange, a fundamental institution of the Romanian capital market, represents an unprecedented success.

The effective promotion to the Emerging Market status allows the Romanian capital market and economy to absorb new funds in the coming years. It also sends a strong signal to private and state companies that they can grow significantly via the stock market.

It is very important for Romania to consolidate the Emerging Market status, and one of the goals is to increase the number of companies included in the FTSE Russell Indices.
Since September 21, already two Romanian companies, Banca Transilvania and Nuclearelectrica have met the necessary criteria to be included in the Emerging Markets indices. BRD Group Societe Generale is another candidate that could meet the requirements in the future, in order to be included in the indices.

" This promotion is a big step towards a more dynamic development of the Romanian capital market. From now on, we have better premises to facilitate access to capital for Romanian companies, to materialize the Romanian economy potential and to obtain the recognition of our stock exchange as an emerging market by a broader foreign investors’ community", said Adrian Tanase, CEO of the Bucarest Stock Exchange, in November 2020.

The Emerging Market status will further strengthen the role of the capital market in the local economy by creating more opportunities for local investors, both private and institutional, to direct savings and investments towards long term projects. This is especially important in the current low-yielding environment with short-term interest rates in many cases below inflation,” said Mihai Purcarea, CEO of BRD Asset Management, one of the largest local institutional investors, in November 2020.  

As the main local custodian in terms of assets under custody, BRD Groupe Societe Generale has invested a great deal in IT infrastructure, in order to simplify its processes and prepare for further digital transformation. BRD Securities Services also increased its efficiency and the quality of its operations, in particular thanks to process automation and robotisation.

BRD Securities Services is also working to adapt its systems and processes in order to respond to all requirements of the CSDR1 and SRDII2 Directive.

BRD Groupe Societe Generale, as the main local custodian, is closely working with the local Central Depository in order to facilitate the access of foreign investors to the local market and to respond to all regulatory and operational requirements of our clients.

 

Article written by:

Claudia IONESCU  - Securities Director - BRD Group Societe Generale

Christophe Colentier - Country co-ordinator for BRD Romania - Societe Generale Securities Services


1 CSDR: Central Securities Depository Regulation

2 SRDII: Shareholder Rights Directive

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