Abstract
At the end of the year is time to recollect the main events of 2007, evaluateour opinions throughout the year and, as usual, present our expectations for 2008.
The turnover for the first two categories of Bucharest Stock exchange grew by 37%, reflecting investors’ increasing interest for the capital market in Romania. Apparently the structure of this turnover suffered some modifications, as 15 companies were responsible with 90% of the trading volume, as compared to only 10 companies last year. In fact, this diversification only took place among less visible companies, while the SIFs kept unchallenged their first place in the liquidity top and were responsible with 55% of the trading volume on BSE. In fact, the financial sector had an immense 74% contribution to the trading volume for the first two categories, identical to that of the previous year. In this case, the diversification was realized at the expense of oil and pharmaceutical sector, as they had a less favorable year.
Though nothing changed about investor’s preference for financial companies, a tendency to diversify exists concerning less visible companies. The risk appetite is still high and large alphas are looked for among less visible, less liquid, second tier or even Rasdaq companies. This is a normal, healthy tendency in our opinion that compensates the scarcity of new issuers that qualify for the top categories. In fact, we’ve recommended investments on Rasdaq companies throughout the year, and these investments certainly paid off. However, the drawback is that such investments require some strong fundamental analyses filters; otherwise the asymmetric Information and low liquidity can turn too costly. Finally, for the first two categories of BSE we expect to see a feebler support coming from the banking sector which probably had an exceptional year in 2007 but which might generate however 8 to 10 points of gains for the main indices in 2008. The oil sector could help with about 4 points of growth, exclusively due to Petrom anticipated evolution, while Rompetrol’s contribution might turn insignificant unless new Information comes about the deal with KazMunaiGaz or extraordinary financial results are obtained. Transgaz effect on the main indices can’t be estimated right now; however the rights’ price evolution leaves little place for significant upside potential so that the shares price after listing can’t do much to influence indices. In conclusion, we see an upside potential of 18 to 20 points for BET, a bit higher for BET-C while BET-FI might sustain a similar evolution to that of 2007, a gain of 23 to 25 percent, but strongly depending on BCR and Erste evaluation. (details are available in Romanian)
BVB indices
| indices | Change | Dec 19, 2006 | Dec 21, 2007 |
| BET | 22.05% | 8050.18 | 9825.38 |
| BET-C | 32.64% | 5025.08 | 6665.47 |
| BET-FI | 24.85% | 63011.74 | 78669.68 |
BET (chart)
TOP 5 - PRICE GAINERS [RON]
| Symbol | Change | Dec 19, 2006 | Dec 21, 2007 |
| EFO | 351.61% | 0.434 | 1.96 |
| CMF | 279.89% | 1.79 | 6.8 |
| EPT | 263.64% | 0.275 | 1 |
| OIL | 246.72% | 0.274 | 0.95 |
| EXC | 202.38% | 0.84 | 2.54 |
EFO (chart)
TOP 5 - TOTAL VOLUME [RON]
| Symbol | Volume |
| SIF5 | 1,956,659,711 |
| SIF2 | 1,761,882,217 |
| SIF1 | 1,091,985,775 |
| SIF3 | 1,039,804,625 |
| TLV | 1,019,794,854 |
TOP 5 - VOLUME (% of subscribed capital)
| Symbol | Volume / Number of Shares |
| ALT | 145.28% |
| SIF2 | 103.10% |
| BRK | 92.03% |
| SIF5 | 88.52% |
| SRT | 60.39% |
Last week
Last week BET and BET-C gained 4.22 and 3.21 percent, respectively, while BET-FI lost 2.05 percent. The average trading volume was much higher than the last trading weeks (except for that affected by Transgaz ipo), while the market capitalization jumped 2.05 percent to 85.96 billion lei. Following the announce concerning its privatization, Antibiotice grew the most (+15.82% last week) and was followed by Banca Carpatica and Comelf, while Altur and Mecanica Ceahlaul had the most serious price losses (-8.1 and -7.46 percent, respectively). The SIFs were the most traded, while compared to the total number of shares Condmag and broker also registered important transactions.
This year, up until now
Since the beginning of the year BET and BET-C advanced 22.05 and32.64 percent, respectively, while BET-FI is 24.85 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.
For further Information please contact Confident Invest, 7 Nerva Traian Str., 031042 Bucharest, Romania
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 21 2007.pdf, 88 Kb
