big changes proposed, but low likelihood of implementation
The new incoming government, led by Prime Minister Mihai Tudose, has signalled its desire to change the tax structure for households and corporates, as well as the pension system. Most of the ideas proposed are not new, however, with the biggest surprise being a rather nebulous proposal to eliminate the 2nd pillar of the pension system in a similar fashion to the current Polish proposal (although this proposal has been denied by the incoming government). We see significant hurdles to the implementation of most of these proposals due to: insufficient analysis on the impact for the budget; limited fiscal manoeuvring; and a high likelihood of private sector complaints regarding some of these measures. Overall, we keep our assessment of Romania unchanged as, fundamentally, the government's proposals do not signal a change in the underlying philosophy, and there is a low likelihood of implementation in the next year, in our view.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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