Abstract
Last week Bucharest Stock exchange showed a perfect similarity of its evolution to the international financial markets. The later were driven by Fed’s new idea meant to help financial sector, Carlyle’s collapse, the fall in retail sales or Standard and Poor’s optimistic report. Investors proved that they could behave euphoric when there are grounds to believe that the credit crisis is coming to an end. Consequently the market overreacted at the FED’s new Term Securities Lending Facility (TSLF) announce, meant to help financial institutions. Next day after the announcement, however, markets retracted, as investors probably realized that this attempt won’t solve underlying problems. Moreover the housing market continues to suffer, while inflation is starting to affect consumer spending. Though Fed’s idea may help financial institutions, it won't solve the other problems in the US’s economy. While tangible effects will only appear in the long run, until then it is hard to forget the latest economic data, which point to a weaker economy.
The enthusiasm was reiterated on Thursday when Standard and Poor’s predicted that financial companies are nearing the end of the massive asset write-downs. This report created some hope in the market, but it will probably remain nothing but a one-day rally in a bear market. The fall in the consumer spending reported this week, the weakness of the dollar, the strength in commodity prices, and the weak growth of the economy made investors worry about stagflation. However, on Friday consumer prices were reported unchanged in February, which makes a new rate cut almost certain at Fed’s meeting next week. Still, the worries concerning inflation can not be forgotten as commodities hit new records high: dollar dropped to the weakest level against the JPY in 12 years, gold pass 1,000$ for the first time, and crude oil passed 111$ a barrel. Decision to cut rates weakens the dollar, and that could bring up oil and gold prices to new records. European Union may be as well affected by the weak dollar as this puts pressure on exports. A stronger dollar would help EU in fighting inflation, which was reported to be 3.3%, higher than previous anticipated. Given the fact that the estimate for EU’s economic growth was revised downwards, the dollar’s continuing weakness could make us wonder about EU facing new difficulties.
To sum up, investorslook for any proofs that US economy will overcome the problems and they seem to believe, even for a short while, in almost anything that could pass for such a proof. However, we expect local or foreign markets to be affected by cold showers of predictable negative reports, while sustainable gains could only appear after consistent and positive economic data are being published.
Last week
Last week BET and BET-C won 2.24 and 2.36%, respectively, while BET-FI went down 3.19%. The average trading volume gained 29.79% to 28.23 million lei daily, while the market capitalization went up 3.25 percent to 116.2 billion lei.
| BVB indices | |||
| indices | Change | Mar 07, 2008 | Mar 14, 2008 |
| BET | 2.24% | 7,286.33 | 7,449.66 |
| BET-C | 2.36% | 5,135.95 | 5,257.02 |
| BET-FI | -3.19% | 59,425.18 | 57,528.28 |
BET (chart)
Regarding the gain in capitalization, Petrom is leading, followed by BRD, and leaving the rest of the companies far behind. BRD announced a 61% increase in dividends last week that might explain the interest it triggered among investors. Also, the 7.38% gain for Petrom, coupled with its record trading volume for last week are clear signs of a strong and increasing interest for these shares.
| TOP 5 - PRICE GAINERS [RON] | |||
| Symbol | Change | Mar 07, 2008 | Mar 14, 2008 |
| AMO | 8.7603% | 0.0605 | 0.0658 |
| TUFE | 8.6093% | 0.7550 | 0.8200 |
| SNP | 7.3791% | 0.3930 | 0.4220 |
| BRM | 6.5327% | 1.9900 | 2.1200 |
| BRD | 5.5276% | 19.9000 | 21.0000 |
SNP (chart)
SIF Transilvania and SIF Banat Crisana suffered the most significant decline in capitalization, as the companies lost 87 and 60 millions lei, respectively.
The SNP and SIF5 were the most traded last week while compared to its total number of shares the most significant trades were conducted with SIF Oltenia’s shares.
| TOP 5 - CAPITALISATION LOSERS [MRON] | |||
| Symbol | Change | Mar 07, 2008 | Mar 14, 2008 |
| SIF3 | -87.371 | 1,878.487 | 1,791.115 |
| SIF1 | -60.373 | 1,536.778 | 1,476.405 |
| IMP | -46.000 | 540.000 | 494.000 |
| ART | -40.484 | 429.381 | 388.896 |
| SIF4 | -40.352 | 1,452.666 | 1,412.314 |
SIF3 (chart)
| TOP 5 - TOTAL VOLUME [RON] | |
| Symbol | Volume |
| SNP | 21,129,184 |
| SIF5 | 17,069,941 |
| SIF2 | 11,053,575 |
| SIF1 | 10,166,401 |
| BRD | 10,137,397 |
| TOP 5 - VOLUME (% of subscribed capital) | |
| Symbol | Volume / Number of Shares |
| SIF5 | 0.91% |
| SIF2 | 0.79% |
| SIF4 | 0.68% |
| SIF1 | 0.67% |
| COMI | 0.64% |
This year, up until now
Since the beginning of the year BET and BET-C lost 24.18 and 21.13 percent, respectively, while BET-FI is 26.87 percent lower than its level on 21st of December 2007. The SIFs, BRD-GSG and Banca Transilvania had the highest trading volume for this period. The trades with Siretul Pascani, 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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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 Mar 14 2008.pdf, 72 Kb
