Why is selection of FP broker such a high stake?

The broker selected to assist with the most important floatation on the Bucharest Stock Exchange will have to put together the floatation prospectus that will be used to promote Fondul Proprietatea (Property Fund-FP) on foreign markets, too, and make sure investor interest is high enough to yield a satisfactory price after listing for the state and shareholders.

Apparently, the floatation of Fondul Proprietatea is an easy job. The broker has to put together a several hundred-page prospectus and get the necessary approvals from the National Securities Commission (CNVM).

In reality, however, the selection of the broker for Fondul Proprietatea has got both the biggest brokerage firms on the market and the management of the Fund all worked up, with the latter having to choose from the four bids submitted by brokers until Wednesday.

Looking at the situation strictly money-wise, there is no explanation for the fierceness with which the biggest names on the local brokerage market are vying over this contact, which will get the winner only several thousand euros (i.e. as much as the fees some make in one day). The main stake for the brokers in the race, however, is to prove they have the necessary expertise for the future IPOs of the state-owned companies, which translates into contracts in the range of several hundred thousand euros.