I had a look over the 2003 report from the Romanian Stock Exchange (BVB). There are a couple of notes I made:

- in the 1999-2003 period the number of listed companies halved (from 127 to 62)

- in the same period of time, the transaction value increased by 250% (from $125mn to $307mn) while the market value of the listed companies increased from $316mn to $3.7bn!!

- the number of brokerage and investments houses affiliated with BVB decreased in the same time range from 150 to 73.

- 84% of the listed companies had initial equity value of less than ROL 8bn (about $250k)

It also should be noted that several of the companies listed as a result of privatization back in the first part of the last decade got delisted due mainly to poor financial performance. Also it seems that the market trend is on an increasing level, even though it originated less from outside investments and more from increasing stock prices. At the same time, most of the transactions made by the foreign investors were US-based (some 35%) people with a strong investing culture in the stock exchange. The investment companies number may have declined because of the lack of attractive stocks in that period combined with the SNI/SAFI scandals (investment funds that went bankrupt at the end of 90s) which affected investors confidence.

In the short term there will be probably more gains given the increasing trend in the quotes; nevertheless I doubt that in the future we will see spectacular investments in BVB, mainly for (i) lack of liquidity from the market, as foreign investors will still look fro SMEs - a sector that is rather underinvested in Romania at present; (ii) the lack of IPO exit culture of Romanain SMEs and (iii) the deregulation from last year permitting Romanain investment houses to invest abroad. Perhaps a solution for BVB would be looking up for some regional partnerships - alliances or even a merger.