Romania can become an emerging market in the following 12-18 months
Top representatives of the local asset management industry, which enjoyed its fastest growth last year since the economic crisis, believe that Romania must grab the opportunity it has right now, to become an emerging market in the following 12 to 18 months.
According to International Financial Corporation, a member of World Bank Group, an emerging market is "a market which is growing both in size and in sophistication degree, as opposed to a small market, which is inactive and doesn't seem to change".
There are more positive signs that lead to this opportunity:
1. Romania regained its investment credit rating after six years at Standard&Poor
2. "We believe Romania will maintain steady economic growth, averaging 3 percent over 2014-2017", S&P analysts stated;
3. Romania has largest annual economic growth in the EU in the first quarter of 2014, with 3,8 per cent;
4. Romania is one of the very few countries maintaining a budget deficit lower than the EU standard of 3 per cent;
Dragos Neacsu, Chairman of the Romanian Association of Asset Managers (AAF) stated during the "Challenging Crossroads" Round Table, held in Bucharest, that the Romanian economy needs "public policies with immediate effects". "The time for action is now", that was the AAF President's message to the representatives of the business community and to the political decision makers, who joined the debate hosted by AAF.
Dragos Neacsu highlighted: "The domestic institutional investors make for 10 per cent of Romanian GDP and are fully invested into the way the country's public policies are financed, by owning 10 per cent of sovereign public debt. These investors exercise a positive pressure towards a diversified mix of financing the real economy, including the equity capital markets, where we collectively own 10 per cent of Romanian listed stocks free-float".
The cumulated assets managed by AAF members (investment funds) and by the pension funds are currently worth EUR 9.2 billion. The assets managed by Fondul Proprietatea amount to over EUR 3 billion. All in all, the total value of these investments represents about 10 per cent of the Romanian GDP.
Challenging Crossroads Round Table is the first initiative of AAF to put business decision makers and politicians together in a public debate. AAF strategic areas of action are to build solid and modern institutions and to improve the financial education degree of the Romanian citizens.
AAF is a member of the European Fund and Asset Management Association (EFAMA), which currently collectively represents 17 trillion Euro in assets under management, 1.5 times the GDP of the EU.
Hosted by AAF, the AGM provided an opportunity for EFAMA to engage with its national associations and corporate members. Following the renewed emphasis placed on the future of financial regulations in Europe in the wake of recent EU elections, this is a particularly pertinent time to provide an open forum for debate around key industry issues.