The new index comes after a year with no new company floatation; furthermore, only the listing of Fondul Proprietatea (FP.RO) has managed to change the structure of the transactions on the Bucharest Stock Exchange in the last three years.
The new index will be called BET-BK and will be a benchmark index, tracking the most liquid shares on the market.
“It’s an investable index, which will include 25 stocks and be built in partnership with investment fund managers,” said Alin Barbu, general manager of the Bucharest Stock Exchange.
The Bourse is thus trying to help local mutual fund managers who have been complaining that the market’s current indices are hard to replicate in index trackers. The index trackers, those funds that replicate the structure of stock market indices are very popular worldwide, but barely visible on the Romanian market. Only two fund managers, BT Asset Management and Certinvest currently operate index funds tracking local stock market indices.
The Bucharest Stock Exchange general manager added the index would bring something new, which is how the issuer weight is computed. “It will be an easier to model index,” he explained.
The best known of the current BVB indices is the BET (Bucharest Exchange Trading), which includes the ten most liquid companies on the local market. Some challenge it as being representative because it does not include the regional investment funds (SIF), which are among the most traded issuers on the bourse. The SIFs were not considered companies but investment funds for a long while, and have their own index, BET-FI. This is why they were not included in the overall market index, BET-C, either, which includes all the other companies listed on the Bucharest Stock Exchange.
The floatation of Fondul Proprietatea upset all the category ratings. Fondul Proprietatea was included in the BET, the BET-C and in the BET-FI. The other Bourse indices are more recent. The BET-XT (BET Extended) includes the 25 most liquid companies on the market, among which the SIFs, so that it is more comprehensive than the BET, BET-C and BET-FI.
BET-NG is a sector index that tracks ten energy companies, while ROTX is an index developed in partnership with the Vienna Stock Exchange, and includes 12 of the most important listed companies.
A number of 79 companies are currently listed on the Bucharest Stock Exchange’s main market.
(English version by Loredana Fratila-Cristescu)