BVB CEO:Listing Romanian companies with LSE, a nonsense

The British vote to leave the European Union may become an opportunity for Romania consolidating its capital market bodies, given that dual listings of Romanian companies on the London Stock Exchange (LSE) and the Bucharest Stock Exchanged (BVB) has so far only fragmented their liquidity, argues BVB CEO Ludwik Sobolewski quoted by Agerpres.

2016-06-27 17:01:35

In the new context, he said, many decisions will be discarded at the European Union level in the years to come. Romania, added Sobolewski, should act, and it now needs more stability and development. The capital market should be one of the pillars of stabilisation and development, and Government supporting the capital market organisations should not be mere verbal support, but also real action, added Sobolewski. He said that it will hopefully become more obvious that a strategy based on listing companies with other stock exchanges is a nonsense, he told a specialist conference on Monday in Bucharest.

He added that in some years′ time, the Romanian companies floated in London could fall into a trap, without the possibility of increasing their capital.

The BVB official also said that he understands why the Romgaz natural gas supplier and Electrica electricity company were listed in London as well, so as to attract new investors, but he does not understand the reason for secondary listing of companies already listed, such as OMV Petrom natural gas and oil company.
The disadvantages of dual listing, he said, have become visible with the UK′s EU vote, namely liquidity of Romanian stock listed there was smaller than in Bucharest, but volatility was higher. The companies, he said, lost more value in London than in Bucharest, but unfortunately secondary listings have led to liquidity of Romanian issuers getting fragmented.