FTSE Russell has announced in its September 2019 Country-Classification Review that Romania has achieved Secondary Emerging Market status after being promoted from the “Frontier Market” category.
Romania was added to the Watch List in September 2016 and has made considerable progress in the last three years to warrant the country’s inclusion and promotion into the Secondary Emerging Market category – effective in conjunction with the FTSE semi-annual review in September 2020 – despite previously missing out a few years ago.
The European nation has met the nine FTSE Quality of Markets criteria required for it to move from Frontier Market status to Secondary Emerging Market status, especially after FTSE noted that Romania has improve liquidity on its market in order to support sizeable global investment and trade.
There are three Romanian securities that meet the FTSE Global All Cap Index eligibility criteria:
- Societatea Nationala De Gaze Natural (Romgaz) – Romgaz is he largest natural gas producer and the main supplier in Romania. It is listed on the Bucharest Stock Exchange and also has global depository receipts (GDRs) traded on the London Stock Exchange. It will be added to FTSE’s mid-cap segment.
- Banca Transilvania – Banca Transilvania is the largest bank in Romania in terms of assets and operates in corporate bank, retail banking and asset management. It will also be added to FTSE’s mid-cap segment.
- BRD Groupe Societe Generale – BRD is a universal bank that offers financial services for individual and companies. It will be added to FTSE’s small-cap segment.
These three companies are projected to hold the following weightings in the below indexes:
|Index Name||Projected Weight %|
|FTSE Global All Cap||0.008%|
|FTSE Emerging All Cap||0.078%|
The performance Romania’s Bucharest BET Index ranks it as one of the best Frontier Markets so far in 2019, up 30% so far this year (only behind the Jamaican Stock Exchange).
FTSE Russell have also announced the following:
- Argentina has been removed from the Watch List for possible reclassification from Frontier to Secondary Emerging Market status.
- Vietnam remains on the Watch List as a Frontier Market.
- Tanzania will be assigned Frontier Market status.