How analysts see next seven months on the Stock Exchange

Analysts and brokers on the market expect the Stock Exchange to feel the internal and external challenging macroeconomic context during the following months, advising investors to take shelter in stocks of defensive fields or position themselves on liquid stocks that can offer them rapid exits in case market declines deepen. On the other hand, stock valuation indicators are now much more appealing compared with one month ago, in the context where prices have fallen and profits registered a slightly upward trend in the first quarter. Thus, the overall Bucharest Stock Exchange P/E slid to a level of 10.8 in late May, after having hit 20 in April, close to 2007 peaks. Valued at the level of accounting assets, companies listed on the BSE still seem cheap, with stock prices generally below their accounting value. Adrian Danciu, head of the research department of Broker Cluj, believes investors should focus on companies benefiting from inelastic demand, such as those in the food or pharmaceutical sectors.