The Bucharest Stock Exchange surged yesterday, recovering what it lost in the last ten minutes of Tuesday’s trading session when the market suddenly fell on hearing the news that Traian Basescu, the PNL-PD Alliance candidate for president, had called for a cancellation of the elections.
Things have calmed down in the meantime, with investors gaining some respite thanks to the December 1 holiday, Romania’s National Day. The political situation is moving forward, with the second round of the presidential vote scheduled to be held in one week’s time. Investors jumped to buy the most important shares available in the belief that there was no reason to panic and that similar events in Romania to those taking place in the Ukraine were out of the question.
The main shares gained ground, with companies gaining several hundred million euros in a matter of hours. Purchases of stock on the market exceeded 4.5 million euros yesterday, which saw the market recovering after several days of decline in trading.
“It is clear that money from foreign investors has entered the market. It cannot have been speculation because the value of trading was very high and I don’t think there’s anyone out there that can afford that amount,” explained Rares Nilas yesterday, head of BT Securities, Banca Transilvania’s brokerage firm.
The reaction on the market to Basescu’s statements on Tuesday is now being interpreted by brokers as either the actions of only a handful of investors that had panicked, or an attempt to speculate on a market decline, which some investors had been expecting.
“Somebody must have been speculating on what Basescu said on Tuesday, but the market did not play along today (yesterday) and those intending to speculate were unable to buy cheaper today. It is only natural that certain political statements influence the market and minor speculations caused by political events may still occur,” said Valentin Ionescu, head of operations with brokerage firm Euro Invest Vision. He added that the most important thing for the market is whether a government is formed successfully after the elections are brought to a close.
Petrom, the market’s most important company, yesterday gained 7.9% on Tuesday, adding 230 million euros to its value. Petrom sped past the psychological threshold of 3,000 ROL/share to an all time high of 3,140 ROL/share. Its market capitalisation exceeded 3 billion euros for the first time since floatation.
The other petroleum company on the stock market, Rompetrol Rafinare (Petromidia), proved easily to be the investors’ favourite. It was the most traded stock on the market and its price rose by nearly 11%. Petromidia’s market value increased by 37 million euros to 378 million euros.
Shares in BRD, the worst affected of all by the wave of sell orders on Tuesday, enjoyed an increase yesterday that was greater than the decline in the previous session, hitting an all time high of 34,800 ROL/share. The market capitalisation of the bank went up by more than 50 million euros to 1.25 billion dollars.
vlad.nicolaescu@zf.ro