Comment: Oversight or PR strategy? Romanian PM chooses to go to London for start of Romgaz trading
Romanian PM Victor Ponta will go to London next week to mark the start of trading for Romanian gas company Romgaz on the London Stock Exchange. At first, it sounds like good news, doesn’t it? We're getting somewhere, a Romanian company listed in London – not the first Romanian one, but the first state-owned one! This, of course, produces an amazed: wow!
But wait, should this be another kind of wow? At the same time of Ponta's appearance in London, the shares of the same gas producer will start trading on the Bucharest Stock Exchange, after the most successful local IPO so far, and who will mark that?
Having been explained a few things by someone who knows far more things about capital markets than I do, here's how the 'wow' changes: Wow, the PM goes there for a photo opportunity, so that he can post something on his Facebook account! Or, Wow! Romania chose to direct 36 percent in the Romgaz IPO to the global depository receipts (GDRs)which will start trading in London, presumably to make it easier for large investors to buy Romgaz without bothering to actually come to Romania. Rather than leaving the whole offer at home, skipping the 'international recognition' slice, and asking those international investors to come and invest in Romania, via our own stock market. That would have helped it grow, as it is yet a small stock market.
So in this context, wow, Victor Ponta goes to London instead? I don't remember him ever opening trading on the Romanian stock market, so his choice now seems rather peculiar.
I do not intend to mix politics into this, I don't have any preferences for any political party – in fact, I find them all the same – but this seems like a good opportunity for a political enemy of Ponta's to focus on what we have at home – the Bucharest Stock Exchange.
So I have been thinking, who could open the Romgaz trading on BVB next week? I understand there is an opening event but I don't know who will open trading. I would have put all my money on president Traian Basescu, but I guess he's busy with his vegetable garden these days. Anyway, as I am not a character in the popular political drama House of Cards, I will leave all these to settle themselves as they always do, and I will be watching from the side.
Meanwhile, I see there was a lot of interest from regular, small and large Romanian investors for the Romgaz IPO, which is a good sign. It can be seen as a success of the local stock market. Too bad it's always a game of give and take behind the scenes, between the state, investors, international consultants and who knows what other large international powers.
These are all details which will make some people very happy – and very rich, and which will easily disappoint others who might have had the money and willingness to invest in Romanian shares, but which have been put off. They might not have had all the necessary information, or they could have been disappointed by how public offers are organized, by the bank fees and conditions, and the banks' willingness – or lack of – to offer investment loans.
Going back to the home or abroad choice, I can see the benefits of flying abroad to advertise Romania as an investment destination. I have been so far under the impression that the PM and his team rely on communication and public image, and know how to use them.
So a trip to London now, when the 'kid at home' deserved some recognition?
Corina Chirileasa, email@example.com
(photo source: Wikipedia)