One topic of
conversation at the Bucharest Stock Exchange (BVB)’s recent Investment Spring
event was the prevalence of overnight deposits in Romania and the factors that
could drive Romanians to invest in funds and equities.
“Individuals
increased their deposits last year by nearly RON 15 billion ($3.5 billion) which went to
overnight deposits (i.e. deposits having the maturity the following working
day),” BRD Asset Management’s CEO Mihai Purcarea said in a press release. “This money does not
produce enough value for the clients and it is next to nothing for the economy,
so there is no win-win situation here.”
BVB Chairman Lucian Anghel cited an IMAS
survey that showed Romanians are more likely to turn to family and friends for
money management advice, a problem considering that Romania’s financial
literacy rate is the lowest in the European Union, according to a Standard &
Poor study.
To turn this trend around, industry experts
at the Investment Spring event place an emphasis on increased financial
education and a focus on the dividends produced for equity investors. Anghel
also focused on the positive trend of the country’s returns.
“Romania has been
reporting positive returns in EUR for 5 years in a row,” Anghel said. “As
opposed to other stock markets, the returns on the local capital market have
always been in the black between 2012 and 2016 in euro-equivalent and have gone
up by 97 percent during this time. Basically, those who invested in the capital market
five years ago doubled their investment in euro-equivalent.”
