Bucharest Bourse Operator Looking To Buy Smaller Peers

04.20.2011 By Florentina Dragu

The Bucharest Stock Exchange (BVB.RO) is in talks to acquire several smaller market operators in the region, but nothing is settled yet, general manager Valentin Ionescu said Wednesday.

The Bucharest Stock Exchange (BVB.RO) is in talks to acquire several smaller market operators in the region, but nothing is settled yet, general manager Valentin Ionescu said Wednesday.

"We are carrying talks with several stock exchanges, but nothing is settled yet. These are not energetic negotiations, but rather discussions to get a feel on the situation. Maybe we'll surprise you real soon," Ionescu told a news conference.

He said the Bucharest exchange is willing to allocate around EUR5 million to buy stakes in smaller market operators or even to take full control over some of them.

"There are several smaller exchanges in the region, such as the ones in Moldova, Albania or Serbia," Ionescu added.

The Bucharest bourse aims at becoming a regional market operator and is considering several action plans to that extend, including a merger with the Sibex monetary exchange on the local market, adding new clients to its portfolio or increasing the free-float of listed companies.

"Our goal is to outrank the exchanges in Prague and Budapest in two and a half years, which would mean a daily value of over EUR70 million - EUR80 million a day," Ionescu said.

"Moreover, I hope that in a year and a half we would be regarded as an emerging market and not a frontier market as now, but for that we need a bigger free-float and higher volumes," he added.

Ionescu said the Bucharest exchange has requested permission from the securities commission to expand global accounts usage to all the shares traded on its platform, not only for the shares of investment fund Fondul Proprietatea (FP.RO).

"I understood from our talks with the commission that they would have us implement this method first for the shares in the BET and BEF-FI indices. I hope that in two months from now we will have global accounts for several shares," he said.

The Bucharest market operator reported net profit of around EUR1.4 million in 2009, on an average trade volume of EUR8.4 million a day. For this year, the exchange estimates a net profit of EUR5.1 million and a daily trade volume of EUR11.5 million on average.