December 19 (SeeNews) - Romanian stock indices plummeted on Wednesday as daily turnover surged in a massive sell-off following an ample unexpected fiscal overhaul announced by the finance ministry, Bucharest Stock Exchange (BVB) data showed.
The total equity turnover of the BVB surged to 1.05 billion lei ($258 million/226 million euro) on Wednesday from 73 million lei on Tuesday.
Blue-chip lender Banca Transilvania [BSE:TLV] share price plummeted 19.91% to 1.8820 lei, generating the largest trading turnover on Wednesday- of 170 million lei.
Financial group BRD Societe Generale [BSE:BRD] plunged 16.62% at 11.14 lei in the day's second largest turnover, of 54.5 million lei.
The two financial institutions were also the top decliners of the day.
Oil and gas group OMV Petrom [BSE:SMP] lost 15.97% to 0.3020 lei, in a trading turnover of 32.5 million lei - the third largest during the trading session.
On Tuesday evening Romania's finance minister Eugen Teodorovici told a press conference that the Social Democrat government will approve an emergency decree on an ample fiscal overhaul that proposes, among others, a 'greed tax' for banks, capping gas prices, as well the enforcement of new rules for private pension funds.
Stock indices could continue to fall if the government moves on with these fiscal changes, a local stock broker told SeeNews.
"At one point the market will reach a balance. If the measures remain the ones announced in this initial project and do not change, there is a good chance that the balance is going to be found below, and the decreases we have witnessed today will continue so that the indicators of the companies will become more attractive," Simion Tihon, equity trader and analyst at Prime Transaction, told SeeNews in an emailed statement.
"These are several measures with a cumulative negative impact on the stock price. The tax on assets could halve the profit of banks listed on the BVB - surely, all banks are affected, but the listed ones we can see the market assessment immediately. Then, capping the sale price of natural gas affects other companies. All these companies - banks and firms from the energy sector account for over 60% of the BET index, which is why it has been significantly affected today. In addition, the possibility of withdrawing from pension pillar two affects all companies listed on the BVB," the broker added.
The BVB said on Wednesday in a press release that it took note of the negative effects reflected in major downfalls of the stock market indices as a result of the recently announced government emergency decree.
"The investors are paying special attention to the actions of policy makers that influence the economic environment and the evolution of listed companies, a major aspect of the investment process being given by predictability and legislative stability," the BVB said.
Details follow:
BET |
7,475.22 |
-11.21% |
BET-TR |
10,905.33 |
-11.18% |
BET-BK |
1,456.86 |
-8.96% |
BETPlus |
1,120.48 |
-10.95% |
BET-FI |
34,229.57 |
-5.69% |
BET-NG |
629.14 |
-9.93% |
BET-XT |
684.34 |
-10.71% |
BET-XT-TR |
1,009.92 |
-10.70% |
ROTX |
15,385.30 |
-11.52% |
On Monday, BVB informed that the trading sessions of December 24th and 31th from this year will be shorter and will end by 1300 CET.
BET Total Return index (BET-TR) is a free float weighted index of the 13 most traded companies listed on the regulated market and is adjusted to also reflect the dividends paid by constituent companies.
BET-BK is a free float weighted capitalization index of the most liquid 25 companies listed on the regulated market.
BET Plus is a free float market capitalization weighted index tracking 34 companies listed on BVB’s regulated market except the financial investment companies, that meet the minimum eligibility criteria, which refer to liquidity and the value of shares in free float.
BET-FI tracks the SIFs and property restitution fund Fondul Proprietatea.
BET-NG includes companies from the energy sector and utilities.
BET-XT is a blue chip index and reflects the price evolution of the most liquid 25 shares traded on the regulated market, including the SIFs.
BET-XT-TR reflects the price performance of the top 25 most traded Romanian companies, as well as their gross dividends and cash distributions.
ROTX tracks Romania's nine most liquid stocks. It is a joint index of the Bucharest bourse and the Vienna Stock Exchange.
(1 euro = 4.6571 lei)
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