Best News Network

Romania braced for trading surge after Europe’s largest IPO

Romania’s stock market is gearing up for a swarm of new investors and record liquidity as the country’s largest electricity producer begins trading in Bucharest.

Hidroelectrica SA will kick off its bourse career on July 12 with a market value of roughly $10 billion. That’s after investment vehicle Fondul Proprietatea SA last week raised 8.1 billion lei ($1.8 billion) from the sale of a 17.3% stake in the utility. Retail investors took up a fifth of the shares on offer.

The oversubscribed initial public offering — Europe’s largest of the year — is a test for the Bucharest Stock Exchange, which has one of the lowest liquidity pools of any market in eastern Europe. Renewables producer Hidroelectrica is 80% owned by the Romanian state, which must be held for at least a year.

The Bucharest bourse will extend its premarket order period from 15 minutes to one hour on Wednesday to ensure Hidroelectrica’s debut goes smoothly. Normal trading will open as usual at 10:00 a.m. local time. Hidroelectrica will trade under the H20 ticker and have the fourth-largest weighting in Romania’s BET Index. It replaces aluminum smelter Alro SA in the benchmark index.

In an interview last week, Bucharest Stock Exchange Chief Executive Officer Adrian Tanase said he expected a surge in liquidity from the nation’s largest-ever listing, also predicting all-time high trading orders and volumes on the day.

Erste Group Bank AG is acting as stabilisation agent on behalf of stabilization manager Citigroup Inc. It may use the remainder of Fondul’s stake — which was about 20% — in Hidroelectrica to help support the trading price if required, according to a filing. Bucharest Stock Exchange said trading in Hidroelectrica will take place in accordance with its volatility interruptions mechanism.

Some fund managers are forecasting gains on Hidroelectrica’s reference price of 104 lei a share. “I expect share prices to rise on the first day if there’s no huge drop in sentiment, given especially the retail over-subscription,” said Eszter Lokietek, fund manager at OTP Fund Management.

Attila Gyurcsik, Hungary-based CEO of Accorde Fund Management, who bought into the IPO, said last week that he expected it to “be worth buying more of the shares” in Hidroelectrica since pricing was attractive.

Proceeds from the sale of Fondul’s stake in Hidroelectrica will be distributed to its shareholders, which include pension funds, in the coming months. Fondul’s net asset value will decrease after the Hidroelectrica deal and it plans to start asking shareholders for flexibility to start making new investments to boost its NAV, Bloomberg reported previously.

© 2023 Bloomberg

Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

For all the latest Business News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! NewsAzi is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.