BSE - RASDAQ merger excites interest at the Sibiu exchange

The merger between the Bucharest Stock Exchange (BSE) and the Electronic Market RASDAQ, which may be completed late this year has caught the eye of another market where financial tools are being traded – the Financial Monetary and Commodities Exchange in Sibiu (BMFMS). Discussions regarding a possible partnership between representatives of the Bucharest markets and the officials of the Sibiu Exchange have taken a new turn in the past few weeks. Talks are now looking at a possible participation of the Sibiu-based institution in the merger of the Bucharest markets.

“Following our collaboration proposals, representatives from the Sibiu Exchange have told us that they are going for a merger,” said Septimiu Stoica, vice-president of the Bucharest Stock Exchange. Representatives of the two Bucharest bourses have recently sent several cooperation proposals to the Sibiu Exchange, including the merger option, although they said it was less likely that this would actually happen.

“Our shareholders are leaning towards a merger with the Bucharest Stock Exchange. I believe that a merger with the capital markets will bring improved visibility and territorial promotion for derivate financial instruments,” says Darius Cipariu, deputy general manager of the BMFMS.

The Exchange in Sibiu has more than 100 stockholders, including several brokerages operating in Bucharest, banks and other commercial companies that can participate in conducting market transactions.

The Sibiu-based Exchange trades derivate financial instruments (futures and options), used to cover financial risks, but which are also very popular in speculative transactions.

The banks, that can directly operate on the capital market as of this year, will be able to cover certain risks on this market, such as the fluctuations of the exchange or interest rates and, moreover, they could also bring other investors.

All brokers currently operating on the market will also be able to bring investors to the derivate instruments market, recommending them to use this market in order to cover the risks entailed by investments in stocks. The liquidity of the Sibiu market has posted a rather steep decline in the past few years, with the monthly value of contracts closed on the futures markets in the last two months falling below one million dollars.

For the merger to be concluded, it needs to be endorsed by the shareholders of the two markets. “We have to clarify this issue with the members of the Sibiu Exchange and to bring this alternative to the attention of our members,” Septimiu Stoica said. “The shareholders have already approved the partnership with the Bucharest-based markets. Now we need to agree on the best way to achieve this,” explained Darius Cipariu, deputy general manager of the Sibiu Exchange.

Still, some of the brokers on the Bucharest market are rather reticent about the projected merger with the Sibiu body, since this means they would have to share the future market with stockholders in the Sibiu Exchange. vlad.nicolaescu@zf.ro