Abstract
Although last week was plentiful of news with mixed impact, the capital markets maintained the negative trend which caused considerable corrections for the general index of the Bucharest Stock exchange (25% decline since the beginning of the year). There were short euphoric moments connected to the approval of the White House stimulus plan which should revive the economy or after the comments of the US Treasury Secretary Henry Paulson, according to whom the American economy will manage to avoid recession. However the general trend continued, amplifying investors’ negative sentiments. Although the Federal Reserve is making now more realistic comments, pointing out to major problems- the current lack of flexibility for credits, higher energy prices, higher unemployment rate, weaker service sector- FED Chairman and the White House are confident about the measures taken for straightening the economy. Until the manifestation of these improvements, the financial crises is already showing other negative effects: difficult access to credits for companies, losses from a more volatile currency market, weaker demand, inflation threats and more tensioned monetary markets. Different international institutions are now trying to investigate banks, rating companies, mortgage lenders and other financial institutions in a quite and late attempt to limit the financial markets risks and to set up a more strict set of control rules.
On the Bucharest Stock exchange we had a premieras Erste Bank was the first foreign company listed on the Romanian capital market. The first trading day for Erste was in fact the lowest liquidity day of the last week; the trades with EBS shares represented almost 13% of Thursday' liquidity but the enthusiasm was quickly corrected in the last trading day of the week, as all the indices went down more than 2%. The presence of Erste on BVB should generate debates on BCR’s own listing, and chances are that it even might be endangered.
Last week most of the companies released the financial results for 2007 and the volatility was amplified. According to the preliminary results published by Rompetrol Rafinare Constanta, the company registered losses, 5 times greater than the ones of the previous year. Despite the obvious improvement of the operational income (+16%), the company's results were affected by the oil and currency markets turmoil. Rompetrol Well Services reported a net income double than the one of the last year, but despite the financial performances the investors weren't very much impressed and the overall negative sentiment prevailed. The shares went down 1.43% the day after the announcement was made. Though Transelectrica's management has estimated weaker results, their confirmation caused a correction for TEL of almost 4%. Therefore TEL shares are currently traded with a 10% discount to book value.
Although possible good results released by the companies could hump for a short period the descendant trend, the lack of real economical improvements will delay the expected market revival.
Last week
Last week BET and BET-C lost 2.23 and 2.44 percent, respectively, while BET-FI went down 5.61 percent. The average trading volume gained 15.85% to 27.04 million lei daily, while the market capitalization went up 60 percent up to 109.62 billion lei.
| BVB indices | |||
| indices | Change | Feb 08, 2008 | Feb 15, 2008 |
| BET | -2.23% | 7299.08 | 7136.17 |
| BET-C | -2.44% | 5085.96 | 4961.89 |
| BET-FI | -5.61% | 61060.28 | 57632.54 |
BET (chart)
Top Price Gainers
Azomures was the performer of the week, as the shares went up 11.60%. According to the company's communique, the major shareholder, Transworld Fertilizers Holding reached 75% of the total social capital. Mechel Tragoviste gained 7.75% on a higher trading volume. The company released its preliminary financial results showing a great progress, as the net income for 2007 was 3 times greater than the one of the previous year, on 23% higher sales.
| TOP 5 - PRICE GAINERS [RON] | |||
| Symbol | Change | Feb 08, 2008 | Feb 15, 2008 |
| AZO | 11.60% | 0.181 | 0.202 |
| COS | 7.75% | 6.45 | 6.95 |
| STZ | 7.35% | 0.68 | 0.73 |
| MEF | 6.47% | 2.01 | 2.14 |
| ENP | 5.63% | 4.44 | 4.69 |
AZO (chart)
Top Price Losers
Artrom suffered the most serious correction, a 17% decline. Although the company’s sales in 2007 went up more than 50% as comparative to the previous year, the income went down 36%. Besides most of these 17% decrease was due to the trades conducted with ART shares on the last trading day of the week, on a higher than usual trading volume. BCC lost 8.06%, as according to the preliminary financial results released by the bank, the net income for 2007 was 60% lower than the one of the previous year.
| TOP 5 - PRICE LOSERS [RON] | |||
| Symbol | Change | Feb 08, 2008 | Feb 15, 2008 |
| ART | -16.93% | 38.4 | 31.9 |
| ECT | -14.63% | 0.082 | 0.07 |
| SIF3 | -10.23% | 1.76 | 1.58 |
| CBC | -9.88% | 16.2 | 14.6 |
| BCC | -8.06% | 0.335 | 0.308 |
ART (chart)
Top Volume
The SIF’s, TLV and BRD-GSG were the most traded last week while compared to their total number of shares the most significant number of trades were conducted with BRK shares, followed by 3 out of the 5 SIF’s and Energopetrol.
| TOP 5 - TOTAL VOLUME [RON] | |
| Symbol | Volume |
| SIF5 | 16,246,809 |
| TLV | 15,505,664 |
| SIF4 | 13,945,652 |
| SIF2 | 12,382,734 |
| BRD | 11,352,058 |
| TOP 5 - VOLUME (% of subscribed capital) | |
| Symbol | Volume / Number of Shares |
| BRK | 0.97% |
| SIF4 | 0.97% |
| SIF2 | 0.88% |
| SIF5 | 0.84% |
| ENP | 0.57% |
This year, up until now...
Since the beginning of the year, BET and BET-C lost 27.37% and 25.56 percent, respectively, while BET-FI is 26.74 percent lower than its level on 21st of December 2007. The SIFs, Banca Transilvania and BRD-GSG had the highest trading volume for this period. The trades with Siretul Pascani, SIF Moldova, SIF Oltenia, broker Cluj ans SIF Muntenia 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 Feb 15 2008.pdf, 117 Kb
