THE ROMANIAN'S CAPITAL MARKET CHANCES OF BECOMING AN EMERGING MARKET

This paper addresses the chances of upgrading to the status of an Emergent Market of the Romanian Capital Market, and what actions can be taken in order to achieve this goal. In this regard, the objectives of the paper are to establish an understanding of both the capital market in Romania and what it means to include companies in the MSCI-Morgan Stanley International Index. In this respect, the hypothesis of the research is that Romania has the potential to upgrade to the Emergent Market status given that at least three companies meet the minimum requirements, including those related to the Annual Traded Value Ratio proposed by the MSCI. Following a technical analysis using the MSCI methodology, it was found that the hypothesis is confirmed as three companies meet the ATVR target of at least 15%, such as Romgaz, Banca Transilvania, BRD Group Societe Generale except for OMV-Petrom, which only reached 12.62%. The company needs 19% of the total volume of the total stock market to bring the ATVR level to at least 15%, or USD 1,017,050,098. It can also be said that BRD Group Societe Generale should increase the Free Float market capitalization by 1.0534% that should reach the minimum required by MSCI USD, 763mln. By increasing offer through listing more companies on the Bucharest Stock Exchange and increasing demand through attracting retail investors, trade volumes will grow consistently. Also deepening the financial market, liquidity increases facilitating the decreasing of trade interests and prices leading the Romanian capital market a little bit less expensive. Data was collected from Bucharest Stock Exchange, Trading Statistics section, and daily reports. The methodology has two stages. As a first stage we establish the Annual Traded Value Ratios for 12 months (ATVR 12M) and ATVR for 3 months (ATVR 3M) for each company. The companies are Romgaz, OMV-Petrom, Banca Transilvania, and BRD-Group Societe Generale and the study case in the paper was be OMV-Petrom. During the analysis was elaborated by taking into consideration the MSCI Methodology. The second stage of calculations includes we find out what is the percentage of the total Market Volume that would lead key MSCI OMV-Petrom to increase its ATVR to 15%-minimum level imposed.