Most expensive stocks on the Bourse

SIF Oltenia (SIF5), Banca Transilvania (TLV) and Zentiva București (SCD) are currently among the most “expensive” shares on the Bucharest Stock Exchange in terms of minimum amounts investors have to spend to buy a stake.

On the other hand, Transgaz Mediaș (TGN) shares, whose price is the highest on the BSE (265 lei/each, that is almost as much as the upkeep for a two-room apartment during a winter month) require an almost three times lower investment from investors than SIF5.

How can this paradox be?

The shares listed on the Bucharest Stock Exchange (BSE) are traded in blocks or minimum stakes that vary from one share to another. The minimum trading block for most listed companies is 500 shares. Therefore an investor may not buy fewer than 500 shares in SIF Oltenia or any other SIFs in one transaction. The same minimum requirements apply to Banca Transilvania (TLV), Petrom (SNP), Broker Cluj (BRK) and Biofarm București (BIO).

Any transaction with such shares on the “regular” market, i.e. the market they are officially quoted on has to involve a multiple of the minimum trading block. Stakes below the minimum trading block may be traded on the BSE but the transactions are conducted on the “odd lot” market where prices are usually lower than on the “regular” market and investors generally may only sell and not buy on this market.