Municipal bonds at Bucharest Stock Exchange: what the correlations are revealing?

Abstract

"As highlighted by Pop & Georgescu (2024), the Romanian academic literature concerning municipal bonds is sparse, while the investigations regarding the factors that can influence the sub-sovereign bond trading at Bucharest Stock Exchange is quasi non-existent, to the best of authors’ knowledge. The present paper continues the work of Pop & Georgescu (2024) by trying to identify which of the public available information regarding various interest rates and Bucharest Stock Exchange (henceforth BVB) indices returns influence the trading activity of municipal bond market segment. The correlations presented within this paper imply that the modest profile of municipal bond segment at BVB is related to a relative small number of individual investors that dominate the transactions, using mostly observed data to decided when to trade and what to trade. The scarce correlations that appear in relation with the trading volume and trading value point toward the idea that only a small portion of the listed municipal bonds are owned by individual investors. Key words: municipal bond, Romania, correlations JEL Classification: G12"