Who Stands To Gain From ING’s Exit From Bucharest Stock Market?

Wood&Company, which is based in the Czech Republic, appears to have gained from the exit of ING’s brokerage firm at first. It was the top broker in October with a volume of 127 million lei (EUR28 million), three times the volume of transactions brokered in September.

Early in October, ING announced it would drop brokerage operations in most countries where it operate, except Benelux and Poland, which is the most dynamic capital market in Central and Eastern Europe.

ING’s departure is a heavy blow for the local market, making Bucharest Stock Exchange less visible, as the number of international brokers operating on it is dwindling. ING used to be one of the largest foreign brokers on the local stock market, and had a 12% market share in the first nine months, ranking second among brokerage houses.

Once ING left, some of its major clients–private equity firms based in London–went to other brokers. Wood is one of the few brokerage firms with a regional presence that also operates in London. One important competitive edge is that it hired Ioana Pop in 2010, who had supervised the ING’s brokers team in Bucharest for years.

Wood’s main rival is Swiss Capital, the largest local brokerage firm. Swiss fell to second place in the brokers’ ranking in October, recording RON123 million in transactions. Swiss Capital, however, remains the top broker of the first ten months, with brokered deals of RON3.4 billion and a market share of 25%. Its chief executive is Bogdan Juravle, one of the most powerful local brokers, who used to work for ING until 2007. Juravle also owns 48% in Swiss Capital.

ING’s exit might also generate more business for UniCredit CAIB Securities, too. UniCredit CAIB Securities’ sales manager is Nicoleta Banica, who used to work for ING as an analyst and then for Swiss Capital.

UniCredit ranked ninth among brokers in October with RON21.8 million in transactions and third after Swiss and ING in the first ten months, with a market share of 8.5%. But UniCredit is currently working on integrating its brokerage operations into the bank and the broker will be dissolved afterwards.

Overall, ING’s exit from the stock market overlapped with a significant decline in traded volume on the stock market, which reached the past 22 months’ low. The traded value last month stood at RON402 million, the lowest since January 2011 when Fondul Proprietatea (FP.RO) floated.

(English version by Loredana Fratila-Cristescu)

Top brokers in the first ten months of 2012

Source: Bucharest Stock Exchange