- The Bucharest Stock Exchange (BVB) continued its endeavors to bring the local market to standards well-recognized by the investor community, both local and international. Significant infrastructure projects, such as improvements to the market making program, the separation of the trading system from post-trading, the new trade settlement period (T+2), to name only a few, reached their final stage and were implemented at the beginning of October. These projects, along with the reduction of trading fees, have become new milestones in BVB’s road to modernity and the medium-size CEE exchanges category. These efforts were doubled by actions aimed at facilitating investors’ access to information and improving corporate governance, essential features of a transparent and efficient market.
- BVB[1] generated sales revenues[2] of RON 5.79 mn during the third quarter of 2014, up by 22% year-on-year. Without accounting for public offers, figures point towards flattish turnover for the equities market compared to 2Q 2014, at RON 2.79 bn, which makes the analyzed period the second best quarter of the last 3 years. The average daily turnover for the regulated stock market (public offers excluded) reached RON 42 mn and maintained the significant double-digit growth rate compared to the previous year, i.e. 32% above the 2013 figure.
- The operating profit amounted to RON 2.94 mn in 3Q 2014 and marked a 181% increase compared to the prior-year period. Compared to the previous quarter, when the largest IPO in the history of BVB took place and lifted revenues, the operating profit declined. Lower expenses supported the performance at operating level, as more than 10% decline rates were registered compared to both 2Q 2014 and 3Q 2013.
- The third quarter financial profit went to RON 1.45 mn, significantly above figures reported for previous quarters. The increase is attributable to the sharp depreciation of the local currency against main foreign currencies, resulting in significant unrealized foreign exchange gains of RON 0.88 mn. The third quarter ended with a net profit of RON 3.69 mn, translating into earnings per share of RON 0.48, 3 times above 3Q 2013 and 13% lower on a q-o-q basis.
- All in all, financial figures after the first 9 months of the year pictured a growing market that took advantage of the many structural and operational changes undertaken over the past year. Investments in growth initiatives and infrastructure have started materializing and translated into revived trading activity.
- The total trading value for the first 9 months reached RON 8 bn, without accounting for public offers. For the regulated stock market alone, the average daily turnover was RON 41.05 mn, marking a significant 41% y-o-y increase. Additional turnover came from the public offers segment, which among other significant deals brought Electrica IPO (EUR 444 mn), one of the largest IPOs in Europe this year, according to the IPO Watch Europe report issued by PwC. It is also worth mentioning that 80% of Electrica IPO was placed through shares, due to the increased appetite to invest directly in instruments at the fast-changing platform of the Bucharest Stock Exchange – as compared to the allocation structure for Romgaz offering in October 2013.
- Thus, sales revenues reached RON 18.88 mn after the first 9 months of 2014, up by 39% on the previous year. The operating profit followed suit and came at RON 8.83 mn, 145% higher year-on-year. The financial profit for the first 9 months was RON 2.27 mn, lower compared to the year-ago period. Lower interest revenues and the lack of dividends from subsidiaries (i.e. the Central Depository) were partially offset by the revaluation of investments denominated in foreign currencies, given the depreciation of the RON against the EUR and USD.
- BVB ended the first 9 months of the year with RON 9.33 mn, which represented 94% of the figure projected for the full year.
[1] The financial data have not been audited and represent the individual results of the Bucharest Stock Exchange, prepared up according to the Romanian Accounting Standards (RAS); the financial indicators are expressed in million RON and are rounded off to the nearest integer, resulting in small reconciliation differences.
[2] BVB’s sales revenue consists mainly from fees charged for trades with all listed instruments, fees for listing of companies and instruments, and revenues from data vending services provided to various users.