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Amcham: Romania risks to be placed on the list of downgrade of the capital market in 2021 by FTSE Russell
The Romanian capital market risks to be placed on the list of downgrade by FTSE Russell în September 2021 in case no state-run company is listed on the BVB until the summer of 2021, stated on Monday the representative of the Romanian-American Chamber of Commerce (AmCham) Cristian Agalopol in a plenary meeting of the Coalition for the Development of Romania (CDR).
He presented the results of the working group for the capital market with CDR, the biggest employer organization in Romania. The main priority is keeping the statute of emerging market of the capital market. At present, the statute of emerging market will be obtained in September this year, but there is an issue on the part of the international rating associations, namely FTSE Russell, which has already received the initiative adopted in the parliament, that of cessing the listing of Romanian companies on Bucharest Stock Exchange (BVB). From my point of view with all due respect, this initiative of PSD (social-democratic party – în opposition) reminded me of the slogan in the 90’s of FSN ( national rescue front – the first political party created after '89 events) . ‘ We will not sell our country’. It is an extremely negative initiative for the capital market in Romania, and it is an initiative which, I tell you in all sincerity, as I have discussed with the people in FTSE Russell and those in MSCI, Romania will risk, if it does not privatise or if will not list any company until the summer of 2021, in September 2021, FTSE Russell place us on the list of downgrade. Romania, from this point of view would be a first, it is a situation which we do not want, and it is a situation which places at risk all the efforts of the financial market and all the efforts of the capital market over the last five to ten years’ Cristian Agalopol said.
The representative of Amcham and CDR stated that the majority of the management issues of the state-run companies are solved following the listing on the BVB. ‘ The statistics of the listing of state-run companies proved to be different from the points of view of many political groups in the parliament, namely all the state-run companies which were listed on BVB over the last 5-6-7 years by listing there was obtained a bigger efficiency, a bigger productivity, a bigger transparency for corporate governance. The corporate governance is an issue we all want to have solved, especially in the state-run companies, and we think that by listing some state-run companies to BVB, very many of the issues have been solved. If we have a look at the companies listed until now – Petrom, Transgaz, Romgaz, Transelectrica, Electrica, all these companies are more advanced from the point of view of efficiency and productivity against what they were the moment the were listed’ , Cristian Agalopol said.
FTSE Russell confirmed, in the spring of this year, that Romania is about to be included in the FTSE list of emerging markets in the September 2020 revision. The eligibility of inclusion in indices will be made during the annual revision. FTSE Global Cap of September 2020 and will rely on the trading data on 30th June 2020. The revision of September will analyse the individual liquidity of the monitored companies ( 8 Romanian companies which meet the dimension criteria of FTSE Russell) between July 2019 and June 2020. For a company to meet the liquidity criterion, they need to have a monthly average liquidity of at least 0.05% for minimum 10 out of 12 months. The liquidity, according to the FTSE Russell methodology is made for each company as a report between the monthly average of the traded daily volumes and the number of free float shares.
The global indices FTSE Russell announced on 26th September 2019, that Romania was promoted from the statute of border market to the statute of secondary emerging market and the decision will become effective starting with September 2020.