Five Companies Listed on Both Securities Markets

Starting with June 21st five of the companies on the RASDAQ secuirities market will also be listed on the Bucharest Stock Exchange.

They are Electromagnetica Bucuresti (ELMA), Aversa Bucuresti (AVBU), Comcereal Alexandria (CGIU), UPET Targoviste (UPET) and Severnav Drobeta Turnu-Severin (SEVE).

This double-listing is part of a plan to gradually merge the two organized and supervised stock markets in Romania. The five companies are among the best listed in the first ranking of RASDAQ.

The listing of the companies stock on the Bucharest Stock Exchange was uneventful as it showed altogether weak results, leaving unsatisfied those expecting a rise in the number of shares and in the price of stock.

"The biggest problem is the poor availability of shares on the market. For instance ELMA and UPET have a greater dispersion of stock among small stock-holders for whom it is much easier to put their stock on the market. And yet things did not evolve as expected, particularly because of the low prices," says Dan Popovici, analyst with BCR Securities.

The funny thing though is that the market is on an upward trend, with stock listed for a long while with the Bucharest Stock Exchange and considered stale moving up the ranks, as for instance Amonil, Sofert and Electrocontact.

Adrian Resmerita, director with the Issuing Department of RASDAQ, thinks summer time, as always, was not favoring a stock-hike of individual companies but of the five private investment funds (TR. NOTE: known as SIF, according to their Romanian acronym). "The paradox is that if the offer for shares of the new incoming companies on the Bucharest Stock Exchange Market would go up, so would their price per share, since investors would interpret this as a sign that stock-holders are willing to sell for a price. Then both the price and the number of stock available would grow," explains Popovici. Thus saving 20% on transaction costs due to the listing of companies on both markets is in name only, since the transactions themselves stayed low because of lack of liquidity on the stock market.

Merging the two stock markets was the aim behind the move to list the five companies on both of them. The Bucharest Stock Exchange put up a separate section of its trading floor to this end. First in the line of events with a view to merging the two stock markets would come turning the Bucharest Stock Exchange into a publicly listed company, as RASDAQ securities market is.

"The brokers want the merger to proceed and we decided for a speedy process. It’s hard to arrive at final conclusions after only two weeks of jointly listing some companies, but we are sure this is the right way to go for cutting costs too," says Resmerita.

Very soon, other companies in the first ranking on RASDAQ will be listed on the Bucharest Stock Exchange too; they are Braiconf Braila, Rompetrol Bucuresti and ISPAT Petrotub Roman.

A joint committee will develop during the following days the Statute for the Bucharest Stock Exchange as a publicly listed company. The change will cost 18.5 billion lei (around 560,000 dollars) and the Market will keep its name and acronym.

By September 1st its Stock-holders Board will have a meeting deciding on going public and registering it with the Registry for Trade by mid September.