A year of crisis and over 50% slumps in quotations proved that our stock exchange is under-sized and immature.
After lawmakers’ attempt to stabilize a trading by adopting a set of measures, Wall-Street.ro initiates a campaign that with the help of specialists in capital markets, is designed to frame the image of BSE if it had more solid financial tools. In our first issue, managers and brokers in the market have outlined a profile of Romanian trading with short-selling instruments.
The instrument could bring additional liquidity
This type of instrument triggers advantages but drawbacks as well. The additional quantum of liquidity is probably the positive core effect that short-selling instrument would have brought to Bucharest Stock Exchange.
“The existence of this instrument would have worked as fuel injection engine, rushing the burning process,” Silviu Enache (photo), chairman of KD Capital Management stated for Wall Street.
“It is obvious that short-selling would have a positive influence over market liquidity, but probaby this is the gloomy side of BSE,” pointed out Marius Pandele, head of research at Vanguard.
A higher liquidity, better trading volumes would have certainly triggered higher incomes both for Bucharest Stock Exchange institution and for brokers, Marcel Marcu, executive at KD Capital Management said.
Gabriel Aldea, broker from Intercapital Invest shares the same opinion. “I strongly believe that the most important contribution of this intrument would be the level of market liquidity, that would have been much higher, with positive implications for all participants to on equity market: investors, brokers, Bucharest Stock Exchange,” he stressed.
If this instrument would have existed in the first place, the declines had not been of this magnitude. There would be enough investors who would have short
