How to Invest in Romania and Get the Best ROI

This manual is for intrepid investors that are thinking about how to invest in Romania and the Bucharest Stock Exchange. Curious about investing in additional frontier markets? Take a look at a listing of our guides here.

Romania is among the chief nations in Eastern Europe and also a mainstay for frontier market investors considering the area. It’s come a long way since leaving communism in 1989. With a GDP per capita hovering around $20,000 USD, it’s among the wealthier frontier market economies we track, but still growing when compared to the majority of the remainder of Europe.

It’s largest trade partners are in the European Union headed by Germany, Italy, France, and Hungary. It is finance ministry has predicted a strong 4.8 percent GDP growth rate for 2016, among the greatest in Europe.

Economy

Romania has a rather well diversified economy with an Economic Complexity Ranking of 0.72, great for 38th in the entire world. Here’s a visualization of the Most Important exports:

Notable Firms in Romania:

Automobile Dacia: Romania’s national car company, owned by Renault

OMV Petrom: the biggest oil and gas firm in Romania, a part of Communist group OMV

Rompetrol Group (aka KMG International): Another big oil and gas firm in Romania
Kaufland Romania: biggest retailer in Romania, a German hypermarket series

Banca Comercială Română (BCR): the biggest bank in Romania

Is It Safe To Purchase In Romania?

 

In accordance with our Investment Safety Rankings, Romania is ranked #44 on earth and can be relatively safe to put money into. Romania’s Corruption Perception Index ranking lagged a little, a potential vestige of communist rule. However on the flip side, it is scared of Doing Business standing was at the mid forties, along with the Fragile States Index had it rated as a relatively calm location.

Could Foreigners Purchase Romania?

Yes, Romania is quite favorable to foreign investors. It is membership in the EU has helped to drive the regional legislation to be EU-compatible, and there are no laws limiting foreign investors from investing directly or via a portfolio investment. They’ve a good deal of stuff available for potential investors, largely to courtroom FDI to the nation.

For equity investors, the Bucharest Stock Exchange is the major path for investment.

Economy hours: 09:30 into 18:10

Local Listed companies (as of Sep 2016): 85 businesses listed on the primary Regulated Market, yet another 279 early-stage businesses listed on the AeRO Market

 

Exchange prices: 10 basis points in the Bucharest Stock Exchange/FSA, also 0.85 bps for settlement and clearing. This is also to broker fees.

Taxes: Capital gains are taxed at 16 percent, and dividends have a withholding tax of 5 percent

The Bucharest Stock Exchange (BVB) provides both stocks and bonds. Equities are divided into two chief markets, the Regulated Market (RM), and also the AeRO marketplace.

The Regulated Market is your most important market for big businesses (minimum market cap of 1 million Euros), and it’s likely where many investors will want to make investments.

The AeRO is for start-ups or even SMEs searching for funding, and is just for list early-stage businesses which don’t fulfill the prerequisites for your Regulated Market.

There’s a minor third marketplace, the ATS International, that can be parallel listings for big foreign businesses, virtually all of which can be German. There are now 14 businesses listed on this region of the market.

Top Firms on the Bucharest Stock Exchange:

Here are the top 10 traded stocks which make up the BET Index (as of 1H 2016):

Company Symbol Industry Mcap (RON mn) Weight (%)
Fondul Proprietatea FP Closed-End Funds 5,095 20.25
Banca Transilvania TLV Banks 4,983 19.81
OMV Petrom SNP Energy 4,078 16.21
S.N.G.N. Romgaz SNG Energy 2,902 11.54
BRD Groupe Soc. Gen. BRD Banks 2,732 10.86
Electrica EL Utilities 2,269 9.02
S.N.T.G.N. Transgaz TGN Energy 1,601 6.36
C.N.T.E.E. Transelectrica TEL Utilities 1,012 4.02
S.N. Nuclearelectrica SNN Utilities 303 1.2
Bursa de Valori Bucuresti BVB Financial Services 183 0.73

 

You Can check out what this Romanian Press Review Service in English has to say about these Stocks Above

To exchange on the Bucharest Stock Exchange, then you have to trade via a Romanian brokerage company that is a part of the BSE Association. Opening processes are directly forward so we won’t go into too much detail.

You may get a complete list of brokerage companies together with their standing concerning trading volumes on the Bucharest Stock Exchange site, here.

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