Banks and SIFs drive the Stock Exchange down by 5%

The Bucharest Stock Exchange yesterday had one of its worst sessions since the beginning of the year, with a 5% fall of the BET index. Hardest hit, however, was the financial-banking sector of this market, though. The financial investment companies’ index, BET-FI, witnessed corrections by as much as 8%, going below the 9,000-point threshold, but managed to slow down its decline towards the end of the session. As a result, BET-FI’s correction at the session’s close stood at 6%.

Brokers believe that statements made over the last few days, about a potential bankruptcy of Austria because of the exposure of its banks to the Eastern European markets, have led investors to panic and dump their shares, especially those related to the financial sector. “I believe today’s session (yesterday i.e.) is the outcome of the statements of the Austrian officials about a potential bankruptcy caused by the exposure of banks to Eastern European markets. We are not sticking out like a sore thumb among the markets in the region, and if we look at what is going on on the market in Vienna, we can see the same thing, corrections of more than 2%, caused by the banking sector losses, that is Erste and Raiffeisen. The news got investors all worked up and raised suspicions among them, making them decide to sell. I don’t think today’s exits were caused by a need for cash, because it is not profitable to exit the market now, when the exchange rate stands at 4.3 RON/EUR,” commented Rares Nilas, chief executive of BT Securities brokerage firm. On the Austrian stock exchange, Raiffeisen (RIBH) shares had gone down by 8.7% towards the session’s close, while Erste’s shares were down 7%. On the local market, the hardest hit were BRD shares, which fell almost 9%, followed by Banca Transilvania and Banca Comerciala Romana, which lost 5% on the average. The SIFs had witnessed corrections ranging between 8% – SIF Banat-Crisana (SIF1) to 4.6% – SIF Transilvania (SIF3).