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What more should the BSE do? The Retail Investors ’ Perspective

What more should the BSE do? The Retail Investors ’ Perspective. AGENDA – “ The Pillars of A New Approach ”. Introduce new products Enhance existing products Entice new investors Leverage the existing investor base. AGENDA – “ The Pillars of A New Approach ”. Introduce new products

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What more should the BSE do? The Retail Investors ’ Perspective

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  1. What more should the BSE do? The Retail Investors’ Perspective

  2. AGENDA – “The Pillars of A New Approach” • Introduce new products • Enhance existing products • Entice new investors • Leverage the existing investor base

  3. AGENDA – “The Pillars of A New Approach” • Introduce new products • Enhance existing products • Entice new investors • Leverage the current investor base

  4. New products: more issuers & product types • Private company IPOs • raise awareness among entrepreneurs via “PR offensive” • 1 to 1 meetings with “local champions” (dedicated BVB task-force necessary to sell the advantages of being listed) • IPOs & SPOs of state-owned companies & more Gov. bonds & notes • lobby the Government for more issues, including higher free-float • Support trading stocks of international companies • secondary listing, ATS trading or GDR-type instruments • Wider array of products (ETFs, CEFs, structured products, derivatives)

  5. New products: testimonials (1) • “Sa faca presiuni constante asupra casei politice si decidentilor sa listeze companiie de stat si municipale. Companiile de servicii publice au nevoie de finantare si transparenta. Sa promoveze intens finantarea prin piata de capital ca alternativa la piata bancara.” • “Sa convinga Ministerul de Finante sa emita titluri de stat romanesti, in lei si euro, direct pe BVB, o mica parte din ceea ce "liciteaza" acuma cu bancile sau vand afara, dar in pachete mici, accesibile si retailului. Cred ca ar ajuta in promovarea ideii de alternativa de economisire prin BVB” • “Sa selecteze 100 de companii romanesti private care ar avea nevoie de finantare. Sa discute si sa explice directorilor si patronilor cum pot emite actiuni, obligatiuni”

  6. New products: testimonials (2) • “As dori sa vad tot mai multe companii straine tranzactionate pe bursa locala (cum ar fi Exxon, Wells Fargo, PetroChina, Toyota, Samsung, Cannon, Gazprom, etc). Asfel ar putea permite alcatuirea unui portofoliu diversificat si din punct de vedere al expunerii pe pietele externe.” • “As vrea sa am mai multe instrumente pe bursa, nu numai actiuni.“ • “La bursa noastra nu poti sa tranzactionezi decat un ETF. Uitati-va la orice alta bursa serioasa sa vedeti in cate fonduri poti sa investesti si faceti o comparatie.”

  7. AGENDA – “The Pillars of A New Approach” • Introduce new products • Enhance existing products • Entice new investors • Leverage the existing investor base

  8. Existing products: facilitate trading • Longer trading hours (suggestion: until the close of main EU markets) • Market-makers for many more financial instruments • Introduce a “push-button” system for securities lending & short-selling • Facilitate margin-trading & derivatives trading

  9. Existing products: facilitate trading / testimonials • “Ar ajuta prelungirea programului de tranzactionare pana la sase si jumatate.” • ”Sa faca toate eforturile posibile sa creasca lichiditatea pe actiunile listate la BVB. Nu stiu de la ce nivel renteaza sa existe market makeri, dar ar putea sa existe pe mai multe actiuni, cel putin pana se insanatoseste piata.” • ”Am demarat procedurile pentru a imprumuta actiuni sa le vand in lipsa dar pana finalizam toata birocratia pierdeam oportunitatea. Ar trebui un sistem mai simplu si mai ieftin. Nu ar strica sa putem face short selling si pe actiunile internationale.”

  10. Existing products: increase trust • Introducing some minimal governance standards: • financial reporting in database format should be mandatory for issuers • dividends and free shares must be paid within 1 month of GSM approval • dividends for all companies should be paid through the Central Depository • enforce disclosure of holdings of 5% or more • Transfer as many RASDAQ companies on the main market as possible • BSE team to convince managers / shareholders

  11. Existing products: increase trust • ”Ar fi de mare folos ca toate companiile listate sa-ti posteze pe site-ul BVB si pe site-urile brokerilor situatiile financiare la timp (sunt foarte multe companii bune care nu au situatiile financiare postate pe BVB, ceea ce ne ingreuneaza procesul de evaluare).” • ”BVB ar putea incuraja companiile care acorda dividend anual (de ex: sif-urile) sa acorde acest dividend semestrial (dupa modelul britanic) sau chiar trimetrial (dupa modelul SUA). Astfel ,vor putea asigura un cash-flow constant pentru investitorii care urmaresc randamentul dividendului si ar incuraja detinerea acelor titluri penru o perioada mai indelungata. De asemenea, ar diminua din efectul speculativ al acordarii dividendului in perioada mai-iunie.” • ”Implementarea pentru toate intreprinderile de distributie a dividendelor in mod centralizat (depozitarul central sau alta solutie).” • ”Sa rezolve cumva situatia Rasdaq, sa clarifice statusul ei sau sa treaca firmele cu activitate de tranzactionare pe BVB.”

  12. AGENDA – “The Pillars of A New Approach” • Introduce new products • Enhance existing products • Entice new investors • Leverage the existing investor base

  13. New investors: advertising • Dramatically increase BSE’s public profile • continuous high-profile marketing & PR strategy • creating new market as permanent goal • Inform the public continuously • constant mass-media presence to improve the capital market’s image • TV sponsorship (e.g. use foreign & local power-brands to promote the BSE) • intensive advertising for exchange products (IPOs, new instruments, etc.)

  14. New investors: advertising • “BVB are nevoie de o promovare serioasa (nu agresiva) daca doreste atragerea de noi investitori. Ideea de baza e ca trebuie sa se promoveze mai tare si au iesit in evidenta urmatoarele cai: reclame la televizor, emisiuni la televizor, banere pe strada, banere si reclame pe internet deoarece momentan pe net se promoveaza mai mult SSIF-urile si ar trebui si BVB-ul. Fondul de compensare a investitorului sa fie facut “mai public”, deoarece se pare ca foarte putina lume stie de el.” • “BVB are nevoie de o promovare serioasa. Acest lucru se poate realiza atat printr-un numar mai mare de IPO-uri dar si prin aducerea de companii straine de prim rang (blue-chip) americane, europene, elvetiene, chineze, nipone, etc.”

  15. New investors: education & partnerships • Educate the public • design an educational framework for beginners to promote exchange investing • weekly or by-weekly live seminars all over the country • use multiple media (print, billboards, TV, radio, on-line) • Engage in partnerships with brokers interested in creating new market

  16. New investors: education & partnerships • “As vrea sa vad emisiuni la TV care sa explice ce face bvb-ul. Cu exemple. Pentru incepatori.” • “Principala problema la noi este de educatie. Fara educatie financiara nu poti sa aduci investitori noi. Nu inteleg de ce nu face BVB-ul asta. Am vazut fel de fel de cursuri, dar nici unul de la BVB.” • “BVB ar putea merge cu brokerii in campanii publicitare, sa mearga sa faca educatie impreuna cu ei si cu CNVM (n.n. ASF).”

  17. AGENDA – “The Pillars of A New Approach” • Introduce new products • Enhance existing products • Entice new investors • Leverage the existing investor base

  18. Existing investors: small investor facilities • Significantly increase retail trenches in IPOs (currently approx. 15%) • Improve corporate governance standards: • lobby ASF/ government to eliminate limits on voting rights (e.g. 5% SIFs limit) • simple mechanisms for proxy / distance GSM voting (e.g. by mail or on-line) • mandatory cumulative voting in GSM, especially for Board members selection • Lobby the ASF to expedite approval of margin trading & collateral regulation

  19. Existing investors: testimonials • “BVB sa insiste pentru un procent mai mare destinat investitorilor mici in ofertele facute de stat... interesul pentru Romgaz este enorm. Am foarte multe cunostinte care sunt interesate sa cumpere actiuni.” • “Managementul companiilor listate ar trebui sa vina mai aproape de publicul interesat sa investeasca, deoarece, momentan, nu stim foarte multe lucruri despre persoanele responsabile de conducerea acelor companii, nu stim ce caracter au, ce intentii au. Astfel s-ar crea o atmosfera de "public disclosure" din partea conducerii companiilor.”

  20. Thank you for your attention! • Introduce new products • Enhance existing products • Entice new investors • Leverage the existing investor base S.S.I.F. Tradeville S.A., Carol I Boulevard, no. 34-36, International Business Center Modern building, floor 10, sector 2, Bucharest, Romania, postal code: 020922, phone: +4021.318.75.55, fax: +4021.318.75.57, Authorized by CNVM Decision no. 2225/15.07.2003

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