Loading ...The Bucharest Stock Exchange (BVB) plans to create an international trading platform in Bucharest to be implemented next summer, which should facilitate the access of major international investors to the most important shares traded on all stock exchanges in Central and Eastern Europe.
The Stock Exchange and the Central Depository have recently co-opted the Italian Giulio Di Cerbo, former managing director with Citigroup London, with more than 35-year experience on the international financial markets to jointly develop the new market, as well as other projects of the Stock Exchange and the Central Depository.
“We have identified 28 projects so far that should significantly improve the market efficiency for the local and international investors and we are currently working on their implementation”, Di Cerbo said in an interview to the Ziarul Financiar daily. He is Senior Executive Global Strategy with the Central Depository and BVB.
The Italian official claims there are extremely important elements of the Romanian economy and stock exchange “superior in many cases to those of the neighbouring countries” not benefiting from sufficient international recognition, but of interest to international investors. “We have to make more efforts to make the international investors aware of these advantages. For example, I noticed our technology is superior to that used on most European markets, including the London Stock Exchange, but this fact remains unknown”, he said.
One of the main advantages Di Cerbo brings to BVB and the Central Depository, in addition to the experience on the financial market, are the contacts with some of the largest financial institutions worldwide. BVB has already announced the release of a new index in the coming period in cooperation with FTSE, the company calculating the main indices of the London Stock Exchange.
The new trading market in Bucharest might be the ace card BVB holds against the stock exchanges based in Vienna and Warsaw, which announced the intention to become the center of the capital markets in the region.
“We have presented our projects to several agents and international investors, who are unanimously interested in participating on the new market”, Di Cerbo added.
“We have presented our projects to several agents and international investors, who are unanimously interested in participating on the new market”, Di Cerbo added.
The platform on which the East-European shares will be traded is to include at first the shares of the top 50 to 100 companies in the region, with the domestic and international institutional investors to conclude transactions on it. One of the advantages of this platform is the investors’ possibility to access the shares of all major companies in the region from a single location, whereas the trading and compensation and deduction rules will be the same and which will comply with the international standards.
The creation of a share market different from the traditional stock exchange is possible, due to the European Union’s directives aimed at increasing competition on the trading market and lowering the costs. Such MTF markets (multilateral trading facility) are already available in Western Europe, mainly set up by investment banks.
One of the main differences from a traditional stock exchange is the fact that the shares of a company may be traded without the company’s approval, provided that the company is already listed on a traditional stock exchange. Such markets also provide lower trading costs.
One of the advantages presented by the new platform BVB plans to create is the guaranteed transaction deduction. The Central Depository is currently negotiating with one of the largest relevant companies in the world to perform such activity, namely to interpose itself between the buyer and the seller, thus guaranteeing the payment and the share transfer to both of them.
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