The Bucharest Stock Exchange (Bursa de Valori Bucureşti in Romanian) is a stock exchange in Bucharest, capital of Romania. On December 1, 2005, Bucharest's electronic over-the-counter stock market, Rasdaq, was merged with the Bucharest Stock Exchange.
The total capitalisation of the Bucharest Stock Exchange is around 55 bn $ and the capitalisation of Rasdaq is around 9 bn$.
The exchange has pre-market sessions from 09:30am to 10:00am and normal trading sessions from 10:00am to 04:30pm on all days of the week except Saturdays, Sundays and holidays declared by the Exchange in advance.
The Bucharest Exchange opened on 1 December 1882 in the building of the Chamber of Commerce in Bucharest. It was regulated by the "Law on exchanges, securities and commodities brokers" ("Legea asupra Burselor, Mijlocitorilor de Schimb şi Mijlocitorilor de Mărfuri") passed one year earlier. There were 21 securities quoted (6 stocks and 15 commercial paper issues) and it was also used for trading commodities. In 1904 a new "Law on commercial exchanges" ("Legea asupra burselor de comerţ") was passed. Among other things, the new law separated securities trading from commodities trading and introduced a Clearing house, which improved investor confidence. The number of quoted securities also increased to 43 (21 stocks and 22 commercial papers).
Market activity was relatively low until 1916 when, due to Romania's entering World War I, trading was suspended altogether. The exchange was reopened after the war and trading and market capitalization increased rapidly based on the setting of many new companies and strong investor demand for securities. Strong growth was driven first by transportation and banking stocks and, after 1925, by speculation with oil companies' stocks (oil stocks accounted for over 75% of market turnover).
After an extended period of strong growth, stock prices fell sharply with the start of the 1929 Great Depression, reaching their lowest historical level in 1932. Beginning with 1933, the exchange started to recover, with prices and trading volume reaching the highest level in interbellum history in 1939. The exchange continued trading through World War II and market turnover even increased. In 1945, after the communist regime seized power, the Bucharest Exchange, as a capitalist institution, was closed and securities trading disappeared for the following 50 years.
After the Romanian Revolution of 1989, the exchange became necessary again. The Bucharest Stock Exchange was reopened on 21 April 1995 in the building of the National Bank of Romania. The exchange started trading in November, with only 9 quoted stocks and weekly trading sessions. In the first year, there was scarcely any activity. Trading started to increase in 1997, when the number of quoted stocks increased to 76, and volume and prices increased rapidly in the first half of the year. However, this rapid growth was followed in the second half of the year by a strong bear market, due to some contagion effect from the East Asian financial crisis as well as to domestic problems. The newly introduced BET index fell 24% in the last three months of 1997 and a further 50% in 1998.
In 1998 listed stocks were separated in two tiers, the exchange introduced daily trading and the National Bank of Romania became the settlement bank. In trying to improve investor confidence, in 1999 the exchange delisted many companies which had various problems, although it allowed their stocks to continue to be traded using its mechanisms. However, market evolution was mixed until 2001.
The exchange turned to a bull market in 2001, strong growth in capitalisation, trading volume and stock prices lasting up to the present. In the next years, stock prices soared, registering record increases. In 2002, BET index increased by 117.5% and, according to Financial Times, BSE has grown fastest among world exchanges that year.
New instruments were introduced by a management of Vienna Stock Exchange in 2001 with a new listing structure and listing of the first municipal bonds. However, Bond trading has been very thin until now, partly because of repeated postponing of the listing of government bonds.
Bucharest Stock Exchange has six indices:
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