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Boom belies narrow market

Romania looks to EU membership

Romania's stock market is flying, but it remains narrow and shallow. The BET-C composite index was139% up in December year on year and rose another third over the first three months of this year. But with a total of 61 companies listed, most of the action takes place in a handful of stocks with limited shares in circulation.

"The market is demand driven, but it remains small, with only half a dozen blue chips, and even these have a low free float of about 15%," says Sergiu Oprescu, chairman of the BSE. "But the market is growing very fast and still has a lot of upside."

So far most of the running has been made by domestic portfolio investors, but Oprescu says that foreign investors have begun to return to the market since the end of last year.

"Over the past two years the growth of the market has been driven by domestic demand, but over the past six months foreign investors have reactivated dormant accounts that have been idle since the [Russian financial] crisis in 1998," says Oprescu.

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