In the Republic of Moldova, there is no real instrument for investing money. The bank deposits are the main and practically only instrument used by the Moldovans. These deposits in 2020 cumulatively came to over 50 billion lei. “They rose considerably during the pandemic year too as the people do not have another investment solution,” economic expert of the Institute for Development and Social Initiatives “Viitorul” Veaceslav Ioniță stated for IPN.
“We can now speak seriously only about one method of collecting money – through bank deposits. Theoretically, there is the possibility of buying shares, but the market is very poorly developed. There are brokers; companies are quoted on the stock exchange and there are banks that sell shares. Shares can be bought not only from the stock exchange, but also from shareholders,” stated the expert.
He noted that the Moldovan citizens became shareholders in 1996-1997, as a result of privatization. Many of them do not know that they have shares. The people consider they have a valuable instrument, but they were actually dispossessed of assets. “I think a share market in the Republic of Moldova would be sustainable if Moldova joined with a regional stock exchange, like that in Bucharest. This would enable to solve several fundamental problems. The top problem: the Moldovan companies cannot be quoted on the stock exchange because this is too small. Vinăria Purcari is the only Moldovan company that was publicly quoted on the Bucharest Stock Exchange.
“If the stock exchanges unite, the citizens of the Republic of Moldova will be able to sell shares in Moldova, which will be automatically sold also in Romania, and the citizens of Moldova will be able to buy shares from companies of Moldova and Romania. It is a large market and I think that our market this way will become viable,” stated Veaceslav Ioniță, noting that the capitalization of the Moldova Stock Exchange is of 30 billion lei.
According to him, the people do not know how the share market works. “In Romania, the state issued state securities for the citizens so that they could buy these securities and make money. The profit rate there is rather good.”
The expert noted that the citizens now take the money to banks and leave it there, practically half of which without interest. The banks buy state securities with people’s money. “In fact, the bank is an intermediary here and charges commission for the simple reason that the people, instead of buying themselves state securities, go to banks and the banks buy state securities. The buying of state securities would be an investment solution for the citizens.”
Veaceslav Ioniță said the issuing of bonds is another solution, but the Republic of Moldova does not have practice in this regard. “Only one company in Moldova tried to issue bonds. The difference between bonds and state securities is that the securities yield profit, while the bond is a loan offered directly to the business entity.”
