Stocks on the Bucharest Stock Exchange started the week by going down, confirming the trend seen at the end of last week. All stock markets in the region ended the day in decline.
The BET index saw a 1.6% decline yesterday, while the SIFs, which have been the main drivers of the market over the last few weeks, concluded their fourth session of decline in a row.
Some brokers say the investors that are cashing in on their profits after the growth of the last few months are pulling the market down, while others say it might be the increase in the euro interest rate by the European Central Bank, which raised the euro reference rate last Thursday and could thus be attracting more investment fund money towards the euro zone. Once the reference rate was upped from 2% to 2.25% on Thursday, the yields on the European markets have gone up and are now at more than 10%. Yesterday”s trading session was the first after the ECB”s decision, as Thursday and Friday were stock market holidays. No strong outflows were noticed on the Bucharest Stock Exchange yesterday, with the value of the transactions standing at 15 million euros, slightly up from the previous sessions, though after four consecutive days without transactions.
“An increase in long-term interest rates should theoretically lead to a decline in the appeal of capital markets. I am not convinced this was the underlying factor for yesterday”s declines, particularly because it seems the interest rate increases will not continue. In the event of a downward interest trend, the main affected parties should be the banks, theoretically,” says Valerian Ionescu, CA IB Securities head of operations.
The main shares affected by the downward trend on the market were those of the banks. Banca Transilvania shares, which had been among the most profitable shares over the last few months, shed nearly 4%, and were also among the most traded on the market. BRD shares went down 2% to 14.1 RON yesterday.
“We did not see any influence of the interest increase on the market. A trend favouring the collection of profits started becoming apparent last week, and probably continued. I don”t think ECB”s decision should have a major influence on the stock market, particularly because this seems to be a one-off move, which will not be followed by any other increases, as it happened with the dollar interest rates,” says Liviu Giugumica, BRD Securities head. He adds that he expects the market to fluctuate around the current levels by the end of the year.
Petrom took yesterday”s declines pretty well, concluding the day with a slight increase. The SIFs continued to go down slightly, with the BET-FI index shedding another 0.6% yesterday.
The Bucharest Stock Exchange witnessed strong growth last month, when the SIFs gained more than 20% while the BET rose by approximately 9%. The market was pulled up by the SIFs, against the backdrop of expectations of a price of more than 3bn euros for the privatisation of BCR, in which the SIFs own stock.
vlad.nicolaescu@zf.ro