Foreign banks try to take control of BVB

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Four brokerage companies, namely BRD Securities, EFG Eurobank Securities, Alpha Finace and Piraeus Securities, belonging to foreign financial groups, asked the alteration of the Bucharest Stock Exchange (BVB) current establishment document, so that the banks may hold shares with voting rights within the Company, the Ziarul Financiar informs on May 19, pointing out that the proposal will be discussed during the general assembly of the BVB shareholders.
 
Foreign banks directly and indirectly hold, through brokerage companies, about 21% of BVB’s share capital. But their influence in BVB is very small compared to their position in the market, where they hold about 40% of the total transactions.
 
BVB statutes allow only brokerage companies part in the transaction system to hold shares with voting rights and implicitly to have a word in making decisions within the Company. Banks may hold only preferential shares without voting rights.
 
The proposal comes in the context that foreign banks try to increase their influence within BVB, which can become one of the most important stock exchanges in the region. The latest transactions with BVB shares amounted to round 240 million euros. The four said foreign brokerage companies that took the initiative hold 5.2% of the Company’s shares.
 
They also claim that the brokerage units belonging to financial groups may transfer to the parent banks the ordinary shares they hold, without granting the pre-emption right to the other shareholders.
 
Morgan Stanley investment bank has lately become the biggest BVB shareholder, with round 5.5% of the Company’s stocks, 2.8% of them, through HTI Brokerage and Financial Investments Company, are shares with voting rights, and 2.7% are preferential stocks bought in the market.
The brokerage companies on the Romanian market and under the Greek banks’ control also represent an important group holding almost 7%, while the Austrian banks own 4.44% of the BVB stocks. BVB also numbers 124 individual shareholders, most of them brokers who bought shares over the last year and who control almost 2% of the stocks.
 
BVB posted a net profit worth 9 million euros in 2007, twice higher than in 2006.
 
The Bucharest Stock Exchange capitalizes 25 billion euros and the average daily transactions were worth 7-8 billion euros, during the first four months of the year.
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