Liquidity on forex market remains low
Dealers traded 28 billion euros on the Romanian forex market in October, 53% less than in October 2008 and a billion and a half euros less than in September in the context where foreign speculators left the market. “Foreigners are clearly gone from the market, that is why I think we should not expect a very significant RON depreciation in the coming period. The dwindling liquidity allows the central bank to better control the exchange rate,” notes Nicolaie Chidesciuc, chief-economist of ING Bank. In October the daily average volume of operations on the forex market amounted to 1.27 billion euros, down from 1.33 billion euros in the previous month. The all-time high, 2.57 billion euros, was set in October last year, when foreign speculators launched an attack on the RON. Analysts say transactions will remain low in the coming period, as well, with Romania being of almost no interest for foreign speculators, since the economy will not recover very soon. “It is clear that volumes will not return to normal until there is an improvement in the state of the economy. At the same time, the NBR (National Bank of Romania) is keeping speculators at bay, which in part has positive effects,” says Chidesciuc.
How much New Year’s party costs at Bucharest’s five-star hotels
Caviar mousse, Norwegian salmon and seafood cocktails, music and dance shows, as well as magic shows, all in the most expensive New Year’s packages available in Bucharest’s five-star hotels. “We sold 80 New Year’s Eve packages in the first day when we launched the offer alone, out of the 500 packages for 4 locations in the hotel. We will definitely sell all the available packages for this party,” said Adrian Adam, sales and marketing manager of Bucharest five-star hotel Radisson. Bucuresti Turism (BUTU), whose main asset is the Radisson hotel in Bucharest, posted a 10.9 million-euro turnover in the first six months of this year and recorded 6.3 million euros in losses, according to data sent by the company to the Bucharest Stock Exchange. This year, hotel operators cut the number of seats available for the New Year’s party to 100 due to the unfavourable economic context. For instance, Radisson had 600 seats available last year, and 500 this year. “The New Year’s party will be held in a new, 150-seat hall on the 21st floor. Last year we had 80 more seats available, but, since this is a crisis year, we are not using Ronda Hall anymore,” said Dana Chiriac, marketing and public relations manager at Intercontinental. The price of a package for the New Year’s party at a five-star Bucharest hotel ranges from 190 euros to 230 euros, but there are also packages worth almost 1,000 euros available. “The most expensive New Year’s package costs 4,200 RON (977 euros) per person and includes a party in the royal suite, a gourmet menu of molecular food (caviar mousse) and a live band,” says Adrian Adam, adding that no package has so far been sold for the royal suite party, but only standard packages.
Carmo-Lact dairy producer expects 11m-euro sales
Dairy and cheese producer Carmo-Lact Prod in Monor, Bistrita-Nasaud county, announced a turnover of over 46.8 million RON (around 11.1 million euros) for this year, close to last year’s results. The company ended the last financial year with around 47.4 million RON in overall sales. “In the forecasts we made for this year, we took into consideration the fact that our clients’ purchasing power is dwindling because of the financial crisis. The interest rate and unemployment rises, coupled with the lower incomes, are just some of the factors that lead to a cut even in the budget allocated for food. The food market is, however, not the most affected by the financial crisis, as it is an attractive market, with competition being increasingly felt,” said Alin Neagos, economic manager of Carmo-Lact Prod. The company produces under the Fagaras. Monor and Tihuta brands.
Fan Courier: Online retail and teleshopping offset auto and banking losses
Fan Courier, the largest courier company held by Romanian entrepreneurs, ended the first nine months of this year with 120 million RON (28 million euros) in turnover, up 11% against the same time last year. “We had set out to preserve this year’s turnover at last year’s level, but, contrary to our original financial predictions, we recorded a higher number of shipments than expected, which explains this rise,” said Felix Patrascanu, manager and founder of the company, alongside Adrian and Neculai Mihai. Fan Courier had almost 8.6 million shipments in January-September, i.e. 31,000 shipments on average a day, 10.4% more than in the similar period of last year. “The market segments that no longer generate the same number of shipments (auto, banking, constructions) are offset by the sectors that have so far recorded moderate growth. The biggest rise so far has been recorded by e-commerce, teleshopping and orders for cosmetic products,” specified Patrascanu. The leading clients of Fan Courier in online retail are electronics and home appliances retailer Domo, mobile phone company Vodafone, eMag, the largest IT&C retailer, as well as teleshopping companies.
Romanians keep 40% of their savings in foreign currency
Romanians keep 40% of their savings in foreign currency, much more than the Czechs and Polish people, who hold 16% of their deposits at the most in foreign currency. The high share of deposits in foreign currency in total deposits held with banks signal their faltering faith in their own economy and in their national currency, analysts say. “Romanians clearly favour deposits in foreign currency. In an economy where the euro reference currency is present on many market segments, this also leaves a mark on the savings behaviour. Around 40% of individuals’ savings are denominated in foreign currency, a level that has remained relatively unchanged, between 35% and 45% in the last seven years, despite the convergence process that the Romanian economy has undergone and the over seven-fold rise in the population’s deposits,” says Mihail Ion, chairman of Raiffeisen Asset Management. Among Central and Eastern European countries, Romania is more similar to Albania, Bulgaria and countries of former Yugoslavia, where population’s foreign currency deposits in the banking system exceed 40%.