Useful information for investors

Stock exchanges

I am the right place to invest financial resources in shares with the aim of increasing the initially invested capital. Growth can be achieved both through the price difference between the time of sale and the time of purchase, as well as through dividends or interest, depending on the structure and nature of the chosen instrument.
Investments on the stock exchange are an alternative to bank deposits. An investment in a company listed on the stock exchange presents a higher degree of risk compared to bank deposits, but the elements through which the invested capital can be increased are more diversified. There is the possibility of an increase in the asset price, but also from other sources such as the granting of dividends in various forms (shares or a share of the profit).

Definitions

Action– represents a participation in the share capital of a company. Shareholders hold a property right over the net assets of the company, proportional to the number of shares held. Shareholders have the right to be informed about the activity of the company, to participate and vote in the General Shareholders' Meetings (GSM), and to receive dividends if the company has made a profit.
Ask– is the price at which a seller is willing to give up securities, goods or currency.
BET is a price index weighted by the free-float capitalization of the 10 most liquid companies listed on the regulated BVB market.
BET-PH is the first sector index of BVB and reflects the overall trend of the prices of financial investment funds (SIFs) traded on the regulated BVB market. To these is added also Fondul Proprietatea.
Bid– is the highest price that potential buyers are willing to pay for securities, goods, or currency.
Coupon– the interest paid for a bond, expressed as a percentage of the nominal value. In case the bond carries a fixed coupon, the interest is usually paid annually or semiannually.
Dividend– there are two types of dividends that a company can issue: cash and stock dividends. Usually only one is paid at a certain period of time (either quarterly, semiannually or annually), but both can also occur. In the case of the cash dividend, a certain amount of money is distributed to each shareholder (for example, in the case of cash dividends of 0.25 lei per share, the owner of 100 shares will receive 25 lei in total). Cash dividends are normally paid to shareholders from the corporation's current earnings or from accumulated profits.
A dividend in shares there is a pro-rata distribution of additional shares for shareholders. A dividend of 10%, for example, means that for every 10 shares held, the shareholder receives an additional portion. In the case where the company has 1,000,000 shares outstanding (common shares), the stock dividend will increase the number of shares outstanding of the company to a total of 1,100,000.
Derivative financial instruments – are contracts of the futures or options type, which have as underlying assets securities or other financial assets.
Municipal and corporate bonds – financial instruments issued by public bodies (state, public body of central or local administration) or private (commercial companies), representing fractions of a loan contracted by the issuer, granting the holder the right to collect interest and the issuer the obligation to redeem at maturity, under the specific conditions of bond issuance.
Closing price – the last price at which a transaction was made during a trading day.
Average price –The average price is calculated by summing all the related prices and then dividing the sum by the number of prices for a bond.
Structured products – are financial instruments of the nature of securities that have an underlying asset, are issued in accordance with a base prospectus, as well as with the documents related to the respective prospectus, and which can be admitted to trading on the regulated spot market. The issuers of structured products can be credit institutions, investment companies, as well as other financial institutions subject to authorization and regulation by the competent authority. Although traded similarly to financial instruments on the spot market, structured products exhibit features common to derivative financial instruments.
Risk associated with investment in the capital market can be defined as being given by the probability of losing part of the initially invested amount or the entire amount. Risk is perceived differently from one individual to another, which is why it represents an important factor considered by investors when deciding to invest in the capital market. Depending on the level of risk assumed, the investor can decide to choose a prudential strategy by selecting financial instruments with low risk (bank deposits, government securities, mutual funds, or government/corporate bonds), or moderate/aggressive strategies by including in the portfolio financial instruments with a higher degree of risk (stocks, futures contracts, options) which can be rewarded by obtaining higher returns. The risks associated with financial instruments involve three elements: issuer risk (company), sector risk, and market risk.
Market risk is given by the existing political and economic conjuncture at the country level. It is a risk that cannot be avoided, as it can affect all issuers, regardless of the sector of activity.
Company risk represents the possibility that a major event may affect the activity of a commercial company, potentially leading to its decline or even bankruptcy. In the capital market, there are companies with a low investment risk level (large and stable companies whose shares have high liquidity) and companies with a higher risk level, due to recorded losses, lower liquidity, or operating within an unstable economic sector. The reduction of this type of risk can be achieved through portfolio diversification – financial instruments of issuers operating in different branches of the economy.
ROTX is a price index weighted by the free float capitalization and reflects in real time the movement of ‘blue chip’ stocks traded on the Bucharest Stock Exchange. Calculated in RON, EUR, and USD, and disseminated in real time by the Vienna Stock Exchange (Wiener Börse AG), ROTX is designed as a tradable index.
Tendency– the general direction of a market or the price of an asset . A trend can be long-term or short-term. For example, a long-term “bull” market often includes a series of short-term downward corrections.

Frequently Asked Questions

For an investment on the capital market, an investment strategy is recommended, which is chosen depending on the investor's risk profile and the amount available for investment.

The price of a share can be easily affected by events that occur both within the company and outside it. Among the most important influences on shares are: the internal, regional, or international political or economic context, the general evolution of the economy and the capital market, information transmitted by the company regarding the signing of new contracts, entering new markets, investments, changes in management, modification of the structure of significant shareholders, financial results obtained, press articles, the general sentiment of investors and market psychology, technical analysis signals.

The minimum amounts to invest are established by the brokerage companies. To invest through BT Trade, the trading platform of BT Capital Partners, the minimum amount is 5,000 RON on BVB, respectively 3,000 EUR on foreign stock exchanges.

It is necessary to have an intermediary company, which will carry out all the operations needed to invest.

BT Trade is the online stock trading platform of BT Capital Partners, the brokerage company of Banca Transilvania.

Companies listed on the stock exchange are required to periodically publish financial statements and other important events.

It is possible to earn through the increase in stock value and through the distribution of company profits to shareholders.

Stock market information can be obtained from brokerage firms, from online trading websites, or from economic press, both print and online.

Company profits can be distributed to shareholders, proportional to the number of shares held, these amounts constituting dividends.

The public offering is the process through which a listed company or one that wants to be listed on the stock exchange sells a part of its shares, in order to finance itself.

The stock exchange is an institution through which companies can finance themselves, investors can invest to obtain a profit, and those who hold or wish to hold shares can trade.

The price of stocks is formed through a mechanism clearly established and controlled by the stock exchange, the main rule being the law of supply and demand.

A stock symbol is a string of two or more characters that uniquely identifies a security, such as shares, to simplify stock market transactions. For example, the stock symbol for the shares of Transilvania Bank is TLV.

From the Bucharest Stock Exchange website, www.bvb.ro.

For trading, brokerage companies charge a commission, as a percentage of the transaction value, and possibly a fixed monthly subscription.

Profits of companies listed on the stock exchange can be distributed to shareholders or can remain in the companies. The decision belongs to the general meeting of the company's shareholders.

Financial Supervisory Authority.

ESG

What is ESG?

ESG is a concept that encompasses environmental, social, and governance criteria, which investors might consider when initiating a potential investment.

For familiarization with ESG principles and more information regarding climate change, sustainability, and non-financial reporting, we invite you to visit the following useful links:

ESG Documents

ESG Preferences

BT Capital Partners S.A. Statement regarding the negative effects of investment decisions on sustainability factors