FTSE Russell took into account liquidity criteria when making this decision that will show in Romania’s real economy, as well.
With the inclusion of the Romanian capital market in the emerging category, larger investors than those mandated to invest on a frontier market will start trading listed securities, especially those included in the FTSE indices.
Although Romania accounts for little of the FTSE Emerging Markets, 0.038%, following the reclassification in July 2020, this is a positive signal for other global index providers. The share FTSE allocated to Romania’s capital market in the FTSE Global All Cap should be 0.04%, the same as in the FTSE All World.
“The inclusion of Romanian stocks in the FTSE Russell emerging markets index is probably important as a signal rather than have a direct impact, because Romania’s share is still low and the index in question is used as a reference by a limited number of investors. However, this is an important signal (…),” says Horia Braun, general manager of Erste Asset Management.
Banca Transilvania (TLV.RO) will be included in the FTSE All World, FTSE All Cap and FTSE Total Cap and Mid Cap, Nuclearelectrica (SNN.RO) will be part of FTSE All Cap, FTSE Total Cap and Small Cap, and Teraplast (TRP.RO) will be included in the FTSE Total Cap and Micro Cap.
(English version by Loredana Fratila-Cristescu)