For nearly two years, frontier market Romania has been on index provider FTSE's watch list for a possible upgrade to emerging-market status. However, some issues remain over the market's attractiveness for foreign investors. Johan Meyer, senior vice president and CEO of Franklin Templeton Investment Management Ltd UK, Bucharest Branch, shares what he thinks it could take for Romania to make the cut.
指数编制机构 FTSE 将前沿市场罗马尼亚纳入待升级为新兴市场的观察名单已近两年。然而，该市场对外国投资者的吸引力仍有不足。富兰克林邓普顿投资管理有限公司(英国)驻布加勒斯特分公司高级副总裁和首席执行官约翰·迈耶分享了他认为罗马尼亚可采取的措施。
In recent years, Romania's economy has been one of the fastest growing in Europe, with strong domestic consumption, low unemployment and fiscal stimulus acting as drivers.
Its economic progress has helped spur a burgeoning middle class, with increased consumer demand not only for goods but also health care, technology and financial services.
Given progress in a number of areas, Romania has been on the cusp of gaining emerging-market status since September 2016, when it was included in FTSE's “watch list” for reclassification to secondary emerging-market status.
鉴于在许多领域的进步，罗马尼亚于二零一六年九月被纳入 FTSE 的“观察名单”，被重新归类为次级新兴市场状态。自那时以来，罗马尼亚一直站在进入新兴市场的门槛上。
According to the index provider, Romania meets eight out of nine of its “Quality of Markets” criteria. The main hurdle Romania has to clear before joining the ranks of emerging markets is an improvement in the liquidity of stocks listed on the Bucharest Stock Exchange (BVB).1
It is unlikely for this to happen before the next FTSE classification review, due in September 2018. However, we think more initial public offerings (IPOs) could offer a solution to Romania's liquidity challenge. Large listings—namely privatizations of state-owned enterprises—should help drive investment flows to the overall market. A larger number of sizable companies could improve the visibility of the BVB among investors, and may lead to higher multiples being paid for the shares of these companies, provided that the interest of minority shareholders are safeguarded through the implementation of corporate governance standards in line with international best practice.
下一次 FTSE 分类审查将于二零一八年九月进行，要在那时之前做到这一点，不太可能。但是，我们认为，更多的首次公开募股（IPO）可以为罗马尼亚的流动性挑战提供解决方案。大型企业上市 – 即国有企业的私有化 – 应有助于推动整个市场的投资流动。更多的大规模企业可提高 BVB 在投资者中的知名度，并为这些企业的股票带来更高的倍数，前提是少数股东权益通过实施符合国际最佳实践的企业治理标准得到充分保障。
Growth Outstrips Europe
Even though Romania's GDP growth is projected to slow down in 2018 to 4.1%, according to the European Commission forecast, growth is still projected8 to outpace many of its regional neighbors. This is one reason we believe this frontier market's future remains promising,9 as long as Romania stays firmly committed to the values of the EU: rule of law and free-market principles.
Several factors have contributed to Romania's growth in recent years, including the elimination of several taxes, a reduction in the value-added tax rate and higher consumption driven by record low unemployment, as well as an increase in general salary levels and pensions. However, the latter's benefits are already beginning to fade, while putting pressure on the state budget. Inflation has been steadily rising since the beginning of 2018, reaching a current level of 4.9%, but it is expected to moderate in Q4 2018.10
近几年，数个因素驱动着罗马尼亚的经济增长，包括取消若干税种，降低增值税税率，由历史新低的失业率带来的更高消费，以及一般工资水平和养老金的提高。然而，后者带来的好处已经开始消退，同时给国家预算带来压力。自二零一八年初以来，通货膨胀一直在稳步上升，目前达到 4.9％ 的水平，但预计二零一八年第四季度将会较为平缓。10
Romania has generally seen lower tax revenue than its regional peers in recent years, so there is scope for continued improvement and reform in this area, including collections, which could improve its fiscal standing.
Meanwhile, economic fundamentals currently appear strong. Romania's unemployment rate hit a 25-year low this year and stood at 4.6% in May.11 Interest rates have edged up this year but also remain low, with the central bank's benchmark interest rate currently at 2.5%. The level of the country's public debt, 34.4% of GDP,12 is among the lowest among EU countries.
Also, the country boasts several fast-growing sectors that present potential investment opportunities such as health care, technology, infrastructure, agriculture and financials.
More recently, however, Romania has experienced higher political volatility, reflected in numerous government reshuffles and legislative changes taking place at an alarming rate, addressing crime, the economy and fiscal issues. These developments raise question marks among investors and international institutions, for which a stable and predictable legal framework is crucial.
Also, as FTSE has noted, liquidity levels on its national bourse remain a concern.
此外，正如 FTSE 指出，该国证券交易所的流动性水平仍然令人担忧。
While there currently are 87 companies listed on the BVB, the MSCI Romania Index currently houses just five constituents.13 Listings in Romania has been slower than some other countries in Eastern Europe but in 2017 there were four new listings of private companies on the BVB, including the largest IPO of a private company in its history.14
And, while private IPOs alone cannot support Romania's emerging-market pursuit, we believe the IPOs of larger state-owned enterprises could bolster its chances of being upgraded.
仅靠私营企业 IPO 无法支撑起罗马尼亚的新兴市场之路，我们认为，大型国有企业 IPO 可支撑其完成升级转型。
However, the process of listing stakes of state-owned enterprises has been put on hold for more than four years—in our view, resuming this process is critical for the future development of the Romanian capital market.
然而，国有企业股权的上市进程已被搁置四年多 – 我们认为，恢复这一进程对于罗马尼亚资本市场的未来发展至关重要。
Improved Corporate Governance
Equally essential is maintaining and properly implementing the current legislation on corporate governance, especially for state-owned enterprises. Improved corporate governance could also provide the Romanian government with cash for other investment projects, such as tackling the country's infrastructure deficit.
From our on-the-ground experience, we think improved corporate governance could also raise the profile of the BVB for foreign investors. In our view, a stable, predictable and transparent regulatory framework is critical for fostering and promoting investor interest in Romania. At a moment when the economy is slowing down, we believe the country's credibility among investors and international financial institutions should be a priority for the political leadership.
根据我们的一线经验，企业治理的改善也可提升 BVB 在外国投资者心中的形象。我们认为，稳定、可预测和透明的监管框架对于培养和促进投资者对罗马尼亚的兴趣至关重要。在经济放缓的当下，我们认为，该国在投资者和国际金融机构中的信誉应成为政治领导层重点考虑的事项。
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What Are the Risks?
All investments involve risks, including the possible loss of principal. Investments in foreign securities involve special risks including currency fluctuations, economic instability and political developments. Investments in emerging markets, of which frontier markets are a subset, involve heightened risks related to the same factors, in addition to those associated with these markets' smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Because these frameworks are typically even less developed in frontier markets, as well as various factors including the increased potential for extreme price volatility, illiquidity, trade barriers and exchange controls, the risks associated with emerging markets are magnified in frontier markets. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions.
1. Source: International Monetary Fund, World Economic Outlook, April 2018.
3. There is no assurance that any projection, estimate or forecast will be realized.
5. Source: National Bank of Romania inflation forecast, data as of May 2018.
6. Source: Romania National Institute of Statistics, data as of May 2018.
8. Sources: Bucharest Stock Exchange, MSCI, as of July 2018. The MSCI Romania Index measures the performance of the large- and mid-cap segments of the Romanian equity market. Indexes are unmanaged and one cannot directly invest in them. They do not include fees, expenses or sales charges.
9. Source: Bucharest Stock Exchange press release, January 11, 2018.
12. Source: European Parliament, Romania's General Transport Master Plan and Rail System, June 2015.