Bucharest Stock Exchange generates 6.6% combined capital and dividend yield ytd

Bucharest Stock Exchange generates 6.6% combined capital and dividend yield ytd
/ bne IntelliNews
By Iulian Ernst in Bucharest April 25, 2023

The BET-TR index of the Bucharest Stock Exchange (BVB), which reflects both the prices of the major companies listed on the Romanian equity market but also their dividends, increased by 3.8% year-to-date (ytd) at the end of March, according to the monthly report published by the BVB on April 24.

This development took place against the backdrop of decreasing liquidity, the report points out. The performance has since improved markedly to 6.6% ytd as of April 24.

Inflation in the first three months of the year was 2.34% and is projected at 7-9% for the whole year.

The number of investors on the BVB increased to an all-time high, driven by individual investors’ interest in government bonds (as opposed to broader investments in a diversified portfolio of more complex investors), and may further grow with the listing of Hidroelectrica.

The ytd growth of the BET-TR index was 5.5% at the end of February but the index plunged in March. 

However, it has recovered during April and currently posts a 6.6% ytd advance, according to the latest data as of April 24. 

Among the blue chips with the largest weights in the BET-TR basket (Banca Transilvania, Fondul Proprietatea and OMV Petrom), the oil and gas company OMV Petrom boasted the largest capital gain of nearly 18% ytd as of April 24, as the company’s shares were pushed up by President Klaus Iohannis returning the solidarity contribution bill (in a form that would cover the oil company) to lawmakers.

In the first quarter, seven listings took place on the BVB for a total of €428mn. There were six bond issues that totalled €427mn and one equity issue of almost €1mn. 

The share price of the Bucharest Exchange as an issuer, a company listed on its own market, reached an all-time high in March. The BVB share had the biggest increase among the issuers in the BET index, going up by 13.5% in a single month. The performance reported in March by the BVB as an issuer, namely +13.5%, came after the share had a yield of 42% last year, including the dividend, and thus obtained the highest growth pace among the companies in the BET index.

The number of investors in the Romanian capital market reached 133,000, an all-time high. 

“Our projects, from the new brand identity, which is fresher and friendlier, to those on increasing the visibility and attractiveness of the capital market as a platform for financing local companies, are elements that add value and have received the appreciation of investors,” said Radu Hanga, BVB president.

“We believe that it is feasible to reach 200,000 investors in the short term, if the pace that we have seen in recent years is maintained, combined with the implementation of the FIDELIS program, the listing of Hidroelectrica, and the simplification of fiscal procedures that is in force since January 1st this year,” said Adrian Tanase, BVB CEO.