Romania's Hidroelectrica surges 9% on market debut

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State-backed Romanian hydro power producer Hidroelectrica rose by around 9% on the Bucharest Stock Exchange on Wednesday after Europe's largest initial public offering (IPO) so far this year.

The placement was many times oversubscribed, with 80% of shares going to institutional investors, including the country's largest pension funds.

"I think in five to 10 years we'll be looking back at this as a defining moment in the history of Romania's capital market," Johan Meyer, portfolio manager at Fondul Proprietatea, said during the stock's opening ceremony. Bucharest's exchange head said the listing could help to lift it to "emerging market" status, from "frontier" market, in MSCI's indices.

Global index provider FTSE Russell upgraded the Bucharest bourse to "secondary emerging market" from "frontier" status in 2020. With a combined market capitalisation of roughly $46.2 billion, the Bucharest Stock Exchange needs liquidity and more diverse offerings, according to pension funds, some of its largest institutional investors.

 

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