Financial Crime World

Moldovan Capital Market Remains in Inception Stage

Challenges Facing Moldova’s Capital Market

Despite significant legislative reforms in recent years, the Moldovan capital market remains stagnant, with few transactions taking place and investors preferring to transfer shares outside of the regulated market. Chișinău, Moldova - The country’s capital market has been undergoing a transformation since 2013, when the Law on Capital Market replaced the old Law on Securities Market.

Regulatory Reforms

Since then, several legislative changes have been made to:

  • Improve the corporate securities registration system
  • Introduce Alternative UCITS (Undertakings for Collective Investments in Transferable Securities)
  • Establish a credit rating agency
  • Regulate the listing process and introduce an investing consultant role (enacted in 2020)

Market Capitalization

However, despite these efforts, market capitalization remains insignificant. Most transactions involve strategic investors consolidating their shareholdings through mandatory or voluntary buy-outs. Risky investments into financial assets are a minor part of the transactions on the Moldovan market, resulting in relatively stable share prices that are immune to boom and bust cycles.

Economic Reform Agenda

The country’s economic reform agenda, which was accelerated by the pro-EU Presidential party’s majority win in the July 2021 general elections, may bring new opportunities for investors. With a stable national currency, low and predictable taxation, and clear plans to implement the Deep and Comprehensive Free Trade Area (DCFTA) with the EU and the Association Agreement with the European Union, Moldova is an attractive option for those looking to expand into the region.

Future Potential

The country’s capital market still has significant potential for growth, but it will require further regulatory reforms and increased investor confidence to unlock its full potential. With continued efforts to improve the business environment and increase transparency, Moldova can become a more attractive destination for investors seeking opportunities in the region.