Abstract
The falls, the negative sentiments and the widespread indecision of the last week, prevailed on the Bucharest Stock exchange. The BSE indices followed closely the external trends, on a growing level of liquidity. The debated effects of the possible US recession as well as the governments’ attempts to straight the economies were among the most influential factors of the stock markets volatility. The quick interest rate cut announced by the FED sooner than expected as well as the Bush administration’s strategy to boost the American economy maintained the speculations according to which the economical situation in the US could be much more severe than thought. Besides it’s not out of the question that this US stimulus plan could solve just a part of the economical problems, as the effects of the refinancing could worsen the current state of facts. Although the FED interest rate cut to 3.5% handed for the moment the stock markets’ dramatically falls, a low level of the interest rate could amplify inflation risks and despite the huge amount of money ($ 150 billion) allotted to the stimulus plan which should revive the consumption growth, the losses suffered by most of the financial companies could determine them to adopt a more cautious attitude with more strictly loans conditions. While waiting the effects of this strategy, the investors saluted the White House’s decision, as by the end of the week most of the international indices went up.
On the BSE, the week was marked by a high level of volatility, with significant up-side downs similarly to the external stock markets. On Thursday, January 24th, Transgaz shares were finally available for trading, as the BSE’s liquidity quickly went up to 83.147 million lei, the second biggest liquidity of the last week; moreover, almost 20% of Thursday’s liquidity was due to the shares of state-owned gas transportation company. From the banking sector, BRD caught investors\\\'attention for the second part of the week, as the mother company, Societe Generale announced a 4.9 billion euros fraud within its brokerage division. BRD shares had some oscillations, as the shares went down by the end of the week more than 8%. Besides, Societe General plans to raise 5.5 billion euros from shareholders after the loss. Among the companies which declared theirs intention of underwriting are giants J.P. Morgan and Morgan Stanley.
As for the next period we expect a high level of volatility to be maintained as we recommend cautious. Although many BSE companies reached very attractive levels of prices, the discount sales period could continue, against the national and international speculations, as there are favorable days for risk loving investors.
Last week
Last week BET and BET-C plunged 4.91% and 3.73% respectively, while BET-FI went up 0.24%. The average trading volume was 71.17 mil lei and gained almost 50%, while the market capitalization went up 0.76% to 74.45 billion lei.
BVB indices
| indices | Change | Jan 18, 2008 | Jan 25, 2008 |
| BET | -4.91% | 8324.74 | 7915.81 |
| BET-C | -3.73% | 5684.74 | 5472.58 |
| BET-FI | 0.24% | 65170.81 | 65330.12 |
BET (chart)
Top Extremes
Mechel Targoviste was the performer of the week, as the company’s shares went up 11.54% during the last 5 five trading sessions. The company is expected to publish the preliminary financial results for 2007 on February 15. The first 3 quarters of 2007 were pretty profitable for the company, as the net income was 16 times higher than the one of the similar period of the prior year.
Carbochim, UCM Resita and Zimtub, companies with small floats, were among top 5 gainers, as their shares went up more than 6%.
TOP 5 - PRICE GAINERS [RON]
| Symbol | Change | Jan 18, 2008 | Jan 25, 2008 |
| COS | 11.54% | 6.5 | 7.25 |
| CBC | 9.46% | 14.8 | 16.2 |
| UCM | 9.09% | 0.33 | 0.36 |
| ZIM | 6.76% | 2.81 | 3 |
| EPT | 3.26% | 0.92 | 0.95 |
COS (chart)
Mecanica Ceahlau suffered themost serious corrections of the week, a 16.67% fall. On Thursday, 25th of January an important package of the company’s shares was traded-1.5% of the company’s total number of shares. BRD slumped more than 8%, as the massive fraud within the brokerage division of the mother company had a negative impact. BRD obtained in the first 3 quarters of 2007 a net income 40% higher than the one of the previous year and the preliminary financial results are expected to be published on the 21st of February.
TOP 5 - PRICE LOSERS [RON]
| Symbol | Change | Jan 18, 2008 | Jan 25, 2008 |
| MECF | -16.67% | 0.6 | 0.5 |
| ASA | -9.17% | 0.6 | 0.545 |
| BRD | -8.44% | 22.5 | 20.6 |
| PPL | -7.89% | 3.8 | 3.5 |
| OIL | -7.78% | 0.835 | 0.77 |
MECF (chart)
Top volume
The SIF’s, BRD and TLV were the most traded last week, while compared to its total number of shares the most significant trades were conducted with Broker’s shares, followed by SIF Moldova.
TOP 5 - TOTAL VOLUME [RON]
| Symbol | Volume |
| SIF5 | 56,469,722 |
| TLV | 45,773,168 |
| BRD | 44,911,401 |
| SIF2 | 41,422,591 |
| SIF4 | 25,809,818 |
TOP 5 - VOLUME (% of subscribed capital)
| Symbol | Volume / Number of Shares |
| BRK | 3.25% |
| SIF2 | 2.91% |
| SIF5 | 2.75% |
| SRT | 2.07% |
| PTR | 1.74% |
This year, up until now...
Since the beginning of the year BET and BET-C went down 19.44 and 17.90 percent, respectively, while BET-FI is 16.96% lower than its level on 21st of December 2007. The SIFs, Banca Transilvania and BRD had the highest trading volume for this period. The trades with Siretul, SIF Moldova, SIF Oltenia broker Cluj and 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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Weekly Update Jan 25 2008.pdf, 116 Kb
