Abstract
International markets annulled the advance taken at the beginning of December, as the never-ending theme of subprime credit, economic slowdown and high inflation in US dominated the experts’ comments. The frequency and timing of this unfavorable turn of events is actually the only unknown in this macro setting which we’ll probably confront with next year too. The relatively lack of experience and low interest of Romanian investors for global investment reduces the chances of an efficient management and anticipation of contagious financial events. Moreover, a simple intention to correlate personal investments with external trends might prove very costly given the high volatility of capital market in Romania. Is not hard to understand why local exchanges could sometimes ignore external trends when fundamentals allow this, when indices seem to have reached a support threshold or investors are sending positive signals. This is probably the explanation of the apparently contrarian evolution of BSE last week, after a period of growth inspired and sustained by external markets the week before. The degree of oversubscribing for Transgaz’ ipo and the impression of undervaluation constructed after months of price lows encouraged some investors to ignore external trend. Overall, the pros and cons for an uptrend were almost equal, so that weekly variations were insignificant and suggested a frail equilibrium. This stability could easily be broken if fears and comments that we’ve mentioned earlier causes significant losses for international markets next week. If this does not happen, however, we expect to see a bulls’ market next week, as fundamentals support this, an excess liquidity generated by Transgaz’ ipo is already anticipated and, why not, we are in a particular time of year which statistically favored buyers. Also for fiscal reasons selling is not recommended before year end, unless losses could be marked, another hint for choosing long positions but only after carefully selecting stocks.
Last week
Last week BET and BET-C lost 0.21 and 0.94 percent, respectively, while BET-FI gained 2.14 percent. The average trading volume was affected by Transgaz ipo, but ignoring that particular day it gained about 20%, while the market capitalization lost 0.2 percent to 83.9 billion lei.
BVB indices
| indices | Change | Dec 07, 2007 | Dec 14, 2007 |
| BET | -0.21% | 9447.73 | 9427.96 |
| BET-C | -0.94% | 6519.15 | 6457.97 |
| BET-FI | 2.14% | 78631.35 | 80317.76 |
BET (chart)
Extremes
Agras Vienna Insurance Group had the strongest advance with an almost 9% gain. Actually, the shares continued the rally started 2 weeks ago, when the company’s management announced the approval of the agricultural insurance portfolio’s transfer to Omniasig.
Plastic producer’s shares, PPL gained 4.71%, on a trading volume much higher usual. Most of the volume mentioned was due to the trades made between SIF2 and SIF5 with 5.14% of the company’s’ total number of shares, at 4.2 lei/share.
UCM had one of the strongest corrections of last week, as the shares lost more than 15%. The company’s shares were excluded from BET-C index, being downgraded from the 2nd category shares to the 3rd category.
TOP 5 - PRICE GAINERS [RON]
| Symbol | Change | Dec 07, 2007 | Dec 14, 2007 |
| ASA | 8.93% | 0.56 | 0.61 |
| SRT | 7.69% | 0.065 | 0.07 |
| ENP | 6.00% | 5 | 5.3 |
| PPL | 4.71% | 3.82 | 4 |
| APC | 4.17% | 0.96 | 1 |
ASA (chart)
TOP 5 - PRICE LOSERS [RON]
| Symbol | Change | Dec 07, 2007 | Dec 14, 2007 |
| ECT | -18.85% | 0.122 | 0.099 |
| UCM | -15.49% | 0.355 | 0.3 |
| ART | -11.35% | 56.4 | 50 |
| ZIM | -8.57% | 3.5 | 3.2 |
| MPN | -7.23% | 0.415 | 0.385 |
ECT (chart)
Top volume
The SIFs had the highest trading volume last week, and were followed by BRD. Prodplast takes the first place for traded shares as percent of the capital after the transaction between SIF2 and 5, and was followed by Zimtub.
TOP 5 - TOTAL VOLUME [RON]
| Symbol | Volume |
| SIF5 | 46,801,937 |
| SIF2 | 42,506,294 |
| SIF4 | 33,514,931 |
| SIF1 | 30,513,049 |
| BRD | 22,728,254 |
TOP 5 - VOLUME (% of subscribed capital)
| Symbol | Volume / Number of Shares |
| PPL | 5.63% |
| ZIM | 2.91% |
| SIF2 | 2.36% |
| SIF5 | 1.86% |
| PTR | 1.71% |
This year, up until now
Since the beginning of the year BET and BET-C advanced 17.11 and 28.51 percent, respectively, while BET-FI is 27.46 percent higher than its level on 19th of December 2006. The SIFs and Banca Transilvania had the highest trading volume for this period. The trades with Altur Slatina, SIF Moldova, broker Cluj, SIF Oltenia and Siretul Pascani had the largest proportion in the companies’ capital.
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Copyright: 2006 SSIF Confident Invest Bucuresti SA. All rights reserved.
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Phone: +40 21 320 21 02, fax: +40 21 320 21 03, e-mail: research@confidentinvest.ro, web site: http://www.confidentinvest.ro
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Weekly Update Dec 14 2007.pdf, 124 Kb
