The foreign capital outflows from the Central and Eastern European markets are beginning to affect the Romanian market. There has been a significant slide in the Romanian market BET index, which has dropped more than 5% since the beginning of May. Falls in the BET-FI index, which monitors the SIF stocks (some of the Stock Exchange”s most liquid shares), were also registered: almost 8% during the same interval.
Yesterday the BET index lost 1.7% and the BET-FI fell 1%, on a day when similar decreases were recorded on the Polish, Czech and Hungarian markets. The biggest loss was posted by the Austrian market, which went down by more than 2%.
Petrom, the largest Romanian company listed on the capital market, yesterday fell 4.7%, more than it had managed to gain in the first two days after reporting exceptional financial results for the first quarter. Despite having managed to triple net profits up to 247 million euros, Petrom shares had only seen a modest 2% growth, before yesterday”s drop. At the same time, the stock of OMV group, which controls Petrom, yesterday was down 1.5% on the Vienna stock exchange, hitting a six-month low.
Since the end of last month, Petrom shares have lost more than 10%, whereas the stock of their other oil company listed on the market – Rompetrol Rafinare fell 18%. Rompetrol Rafinare has recently reported Q1 losses, which dealt a powerful blow to the price of shares.
“Certain foreign investment funds are selling some of their Romanian shares. The stock exchange decline in Romania must be seen in a broader context, as the other markets in the region are plummeting as well. There is nothing special about what”s happening on the Romanian market – it”s part of a regional context,” said Daniel Pocorea, head of transactions at BRD Securities.
According to Pocorea, the sales of Petrom stakes by some investors have nothing to do with the results presented by the company. “But they definitely have something to do with the fact that Petrom stocks are still troubled by the uncertainty of the 8% stake that is still to be distributed among the employees,” Pocorea added.
Market analysts say that, at this point, the market trend is particularly defined by the investors” reluctance to buy, which also triggers decreases, given the very low liquidity.
“I believe this is about an array of factors. From a global perspective, markets from all over the world, from London to Tokyo as well as the emerging markets, have been reeling from the shock caused by the higher than expected inflation reported by the United States. This fuels fears that the Federal Reserve will employ a more aggressive tactic to limit economic growth. Although, historically, the Romanian market has not been tightly connected to the international markets, it looks like the current market perception, which is against stock investments, is also being felt on the Romanian market. This also comes at a time of consolidation, mainly characterised by very low liquidity,” says Bogdan Campianu, head of the analysis department of Raiffeisen Capital & Investment. catalin.ciocan@zf.ro