The tendency of investment funds to shift their focus towards less risky placements felt worldwide has spread to the Romanian financial markets, which continued to witness foreign capital withdrawals.
The Bucharest Stock Exchange yesterday lost more than 3%, continuing the significant downward trend that began at the end last week, while the exchange rate rose by more than 1% yesterday, as investors were dropping RON for foreign currency.
The stock exchanges in the Czech Republic, Poland and Hungary were seeing 3 to 6% declines yesterday afternoon, while the stock exchange in Moscow was down almost 11%. Also down, though not as much, were the developed markets like London, Frankfurt and Tokyo, while the American markets opened the day in decline, as well. Over the last ten days, the CECE index, calculated by the Vienna Stock Exchange for Central and Eastern Europe, went down 15% from the all time high of May 11. On the other hand, the US bonds rose for the third day in a row yesterday, due to investors putting their money in safe places waiting for better days on the commodities and stock markets.
Petrom, the largest company listed on the Bucharest Stock Exchange shed 2% of its value yesterday, despite having announced its highest quarterly profit ever last week.
Petrom”s shares have fallen by more than 11% in the past month. BRD, the second largest company on the market, dropped 3.5% yesterday to the lowest price in three and a half months. At the same time, SIFs that were already down since the beginning of the year, registered an estimated 3% decrease yesterday.
In line with a scenario that has turned into a tradition, the RON followed the trend of the Polish zloty yesterday, but also that of the Turkish lira, which in turn saw significant depreciations. Exactly a week ago, the foreign currency purchases of the non-resident players that reduced their exposures on the emerging markets pushed the RON/EUR rate up by nearly 1%. The official exchange rate went up 0.9%, that is 3.22 bani (100 bani – 1 RON) to 3.5512 RON/EUR. The Turkish lira and the Polish zloty had similar moves, but other currencies in the region were stable.
One of the reasons for the shift in the investment fund policy is, analysts say, the rise in the interests on the dollar lately and the prospects of new increases in this respect. This makes investments in US bonds more attractive. The dollar, however, has not witnessed any significant appreciation trend on the international markets, which could have been generated by massive inflows of capital on the US market.
The RON/EUR exchange rate continued to go up even after the official exchange rate was set yesterday, so that by the close of the forex market, the euro was worth almost 3.56 RON, 3 bani higher than at the start of the trading session. Dealers bet on a rebound of the RON over the next few days, even though the last orders yesterday were for buying foreign currency.