What can you buy on the Bucharest Stock Exchange, the world’s newest Emerging Market?

The promotion of the Bucharest Stock Exchange (BVB) to Emerging Market status by FTSE Russell will bring Romanian listed companies into the attention of a broader category of investors, with the potential to increase demand for their shares and boost their prices. The fact that Romanian companies are more attractively valued and pay higher dividends than similar companies listed on other emerging markets is another argument for positive evolutions in the next period, provided that no major crisis hits the international markets.

Romanian stocks have already had good evolutions this year. The blue-chip index BET, which follows the evolution of the 16 most liquid companies on the Bucharest Stock Exchange, gained 25% in the first eight months of this year (January-August). Adding to this the dividend yields offered by these companies, the total return reached 36%, as indicated by the BET-TR index.

Although the representation of the Romanian economy on the Bucharest Stock Exchange is still low, significant progress has been made in the last ten years, with several market leaders, both from the public and the private sectors, coming to the stock market. The BET index currently includes 16 companies from sectors such as energy, financial services, manufacturing, and services.

Five companies represent close to 80% of the BET index, namely lenders Banca Transilvania (TLV) and BRD-Groupe Societe Generale (BRD), oil and gas group OMV Petrom (SNP), state-owned gas producer Romgaz (SNG), and investment fund Fondul Proprietatea (FP). The BET also includes Digi Communications (DIGI) - the biggest fixed internet and cable TV provider in Romania, Medlife (