2023 will be remembered as a historic year for the Bucharest Stock Exchange (BSE) because of its landmark achievements. The listing of Hidroelectrica, resulting in the highest initial public offering (IPO) in Europe and the third-highest globally for the year, propelled the BSE into the spotlight. The IPO, transpiring on July 12, garnered nearly EUR 2 billion, catapulting the BSE’s capitalization beyond EUR 40 billion. This exceptional accomplishment positions BSE as the third largest market in Central and Eastern Europe and advances its pursuit of emerging market status from Morgan Stanley Capital International (MSCI).

Hidroelectrica’s Impact on BSE

With Hidroelectrica’s share price set at RON 104, its listing resulted in a company capitalization of RON 46.77 billion. This staggering amount equates to approximately 22% of the total capitalization of companies listed on BSE. This event stimulated a historic surge in the BET index, which crossed the 15,000 points mark for the first time. Companies like OMV Petrom, Banca Transilvania, and Transport Trade Services significantly contributed to this performance.

Improvements Needed for BSE

Despite these successes, the BSE still needs to enhance market liquidity to meet the criteria for the emerging markets category. The capitalization of all BSE-listed companies saw a 43% increase, and their market value doubled over the past six years. Government bonds issued by the Ministry of Finances accounted for roughly 40% of the BSE’s primary market activity.

Year of Energy and Utilities

The stock market stars of the year were energy and utilities companies, with the BET-NG index, which includes these companies, rising by 31.3%. Other significant developments in the energy sector included OMV Petrom and Romgaz’s investment in the Neptun Deep project in the Black Sea and Transgaz’s acquisition of the gas distribution network in the Republic of Moldova.

Financial Sector and Defense-Related Companies

The financial sector also saw notable gains, with Banca Transilvania shares increasing by 30% and BRD Groupe Societe Generale shares by 25.5%. Defense-related companies experienced heightened investor interest and share increases due to global security concerns. The best performance among the top 20 most traded shares on the BSE was from Transport Trade Services, with a 55.6% increase, and Turism, Hoteluri, Marea Neagră, with a 51.7% rise.

Author: María Alejandra Trujillo