State-bond market stirs controversies

Although the functioning of the state-bond secondary market, deemed as one of the most profitable businesses in Romania, has not been regulated yet, it has already stirred controversies.

“Personally and without involving any institution I am representing, I think that trading state bonds on BSE (Bucharest Stock Exchange) and Rasdaq is not the most suitable formula for the time being.

The creation of a secondary market to allow the state bonds to be traded on the Stock Exchange and Rasdaq will cause this market to spin out of control.

There will be big temptations and speculations. I think that such a secondary market should work apart from the two institutions of the capital market and that focus should be laid on transactions between banks,” Radu Gratian Ghetea, Alpha Bank Romania prime vice-president and Romanian Banks Association president, said on Tuesday.

On the other hand, capital market representatives plead for state bonds transactions through the Stock Exchange. This market implies a value of more than 2 billion dollars and growth is expected to maintain.

“If things are going to happen this way (i.e. if state bonds are not traded on BSE), we can only regret that BSE offer was not considered.

Even so, we will continue to advocate that state bonds are traded on BSE and we will try to advance the best solutions, given BSE stable activity so far,” Septimiu Stoica told Ziarul Financiar.

Enache Jiru, State Treasury director general, on Tuesday announced that the Finance Ministry has finalised the regulating draft for the state bonds secondary market. Its main stipulation says that state bonds will be traded apart from the BSE and Rasdaq.

“We aim to expand the market and the current infrastructure and to get larger liquidity. If we traded everything on the Stock Exchange, we would have a narrow market.

The project does not pin major changes, but it is included in our strategy to finance the public domestic debt with lower costs,” Jiru specified.