While just a few months ago, the car production and real estate segments were top priorities for investments, things have changed significantly, due to the current financial framework and the quasi-deadlock on the European leveraged buy-out market.
The CEO of Marketer Global consulting company, specialized in Eastern European investments, Dana Dennis Smith, said that Romania is seen as an expensive country. “Entrepreneurs want to sell part of their business at discouraging prices. This is something I saw both before the credit crunch and after,” she said.
Furthermore, the lack of transparency is scaring investors off. “It is hard to see the financial situation of many Romanian companies clearly. This happens at all levels,” regardless of the size of the companies, Dennis Smith added.
However, investors are still interested in the pharmaceutical and energy sectors. Furthermore, the shares of Fondul Proprietatea, a fund established to compensate persons whose assets were confiscated by the communist regime, are interesting for investment funds. “We have institutional investors, large and small, who are very attentive to what is happening to Fondul Proprietatea,” Dennis Smith said.
In spite of this interest, things are grimmer as far as the capital market is concerned. A London City banker said that the Bucharest stock market is “a bad joke,” due to the low liquidity and extreme volatility.
