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Bucharest Stock Exchange Weekly Review 28/09-02/10/2020

posted onOctober 3, 2020

Every Saturday, Investopress brings you a weekly market review of the Bucharest Stock Exchange (BVB), along with key economic, political, business and other important Romanian market moving news of the week. The content of this review is for informational purposes only and should not be interpreted as specific investment advice.  

On Monday, the benchmark BET index, which includes the most traded 17 companies except for the Financial Investment Companies (SIFs), added 0.54% to 9,010.30 points. The BET-TR index, which also includes the dividends offered by the companies from the BET index, also advanced 0.54% to 15,011.78 points.

The BET-FI index, which tracks the five SIFs and the property restitution fund Fondul Proprietatea, increased by 0.05% to 42,560.35 points. The BETPlus index rose 0.52%, to 1,349.42 points. BETPlus tracks the price changes of Romanian companies listed on BVB’s Regulated Market that meet minimum selection criteria of liquidity and free float. Financial investment companies are excluded from the index.

In fixed income markets, Romania's finance ministry raised 621.3 million lei (€127.5 million) selling bonds maturing in November 2024 at an average yield of 3.2%.

In business news, managers in Romania expect a relative stability of economic activity in industry, construction and services, in September and November 2020, according to data by the National Institute of Statistics (INSSE).

The European Commission approved €550 million of cohesion policy funding to support over 120,000 Romanian SMEs affected by the coronavirus crisis.

On Tuesday the BET index ticked down 0.03% to 9,008.04 points while the BET-TR also fell 0.03% to 15,008.01 points. The BET-FI index depreciated by 0.31% to 42,427.82. The BETPlus dropped 0.05% to 1,348.75 points.

In economic news, Romania's budget gap widened to RON54.77 billion in January-August 2020, or 5.18% of the gross domestic product, finance ministry data showed.

On Wednesday the BET index ticked down 0.01% to 9,007.20 points while the BET-TR was also off 0.01% to 15,006.62 points. The BET-FI index was lower by 0.88% to 42,053.00 points. The BETPlus decreased by 0.02% to 1,348.47 points.

In investing news, foreign direct investment in Romania stood at €5.17 billion in 2019 (€2.2 billion equity and €2.8 billion reinvested earnings). Total FDI stock reached €88.3 billion, National Bank of Romania (BNR) data showed.

On Thursday the BET index decreased by 0.08% to 9,000.43 points while the BET-TR fell 0.08% to 14,995.35 points. The BET-FI index grew 0.39% to 42,217.16 points. The BETPlus weakened 0.06% to 1,347.61 points.

In currency markets, Romania's Forex reserves declined to €32.588 billion in September, from €35.768 billion at the end of August, BNR data showed.

In fixed income markets, Romania's finance ministry raised a little over 1 billion lei (€215 million) selling bonds maturing in July 2025 at an average yield of 3.22%.

In economic news, the European Bank for Reconstruction and Development (EBRD) revised down its economic forecasts for the emerging economies where it invests, including Romania, where it forecasts a 5% contraction of the gross domestic product (GDP) in 2020 and a 3% economic growth in 2021.

In labour market news, Romania’s unemployment rate fell to 5.3% in August, from 5.4% in July, data from INSEE showed. Gross wages in companies in the Romanian private sector increased by an average of 6.79% in the first half of 2020, according to a PayWell 2020 survey conducted by PwC Romania.

On Friday the BET index dropped 1.34% to 8,879.96 points while the BET-TR declined 0.39% to 14,936.89 points. The BET-FI index lost 0.38% to 42,058.75 points. The BETPlus was down 1.34% to 1,329.55 points.

In insurance news, companies in Romania underwrote gross premiums of RON5.6 billion in the first half of 2020, up 3.4% year-on-year, data from the country’s Financial Supervisory Authority (ASF) showed.
In financial news, the Romanian government granted RON664 million state aid to companies in the past 11 months for 21 projects with a major impact on the economy and regional development projects.

Bucharest Stock Exchange BET index

(BET index performance Friday 02/10/2020 Graph source: BVB)

Below are the 17 companies that are part of the BET and BET-TR indices:
Alro (ALR) one of the largest vertically integrated aluminium producers in Europe.
Banca Transilvania (TLV), the first Romanian bank listed on the BVB and Romania's largest lender by assets.
BRD - Groupe Societe Generale (BRD), the third largest bank in Romania by assets whose majority shareholder is France's Societe Generale,
Bucharest Stock Exchange (BVB) the parent company of the Bucharest Stock Exchange
Conpet (COTE) the operator of the National Transport System of crude oil via pipelines.
DIGI Communications N.V. (DIGI) the parent company of RCS & RDS-one of the biggest telecommunication operators in Central and Eastern Europe and the largest cable and satellite television company in Romania.
Electrica (EL), the biggest electricity distributor and supplier in Romania.
Fondul Proprietatea (FP) a joint stock company operating as an Alternative Investment Fund.
MedLife (M) the largest private medical operator in Romania.
OMV Petrom (SNP), the largest oil and gas group in Southeastern Europe.
Nuclearelectrica (SNN) , the state-owned operator of Romania's sole nuclear power plant,
Purcari Wineries (WINE), the largest wine exporter from Moldova.
Romgaz (SNG), Romania’s largest natural gas producer and supplier.
Sphera Franchise Group (SFG) a holding company which manages restaurants under the KFC, Pizza Hut and Taco Bell brands.
TeraPlast (TRP) the largest Romanian producer of construction materials.
Transgaz (TGN) the Romanian state-controlled gas transporter.
Transelectrica (TEL), electricity transmission system operator.

Bet Index Constituents News:

  • Fondul Proprietatea shares generated a return of 283% since the fund’s listing on the Bucharest Stock Exchange in January 2011 to August 2020. The total distribution yield has been constantly around 10% in the past decade.
  • Electrica will benefit as of September 30, 2020, from the issuer’s market-making services provided by Czech Republic-based Wood & Company, a leading Investment bank focused on European Emerging markets.
  • TeraPlast Bistrita requested €4 million state aid to finance an investment project totaling €7.9 million in enhancing production capacity.
  • Lenders BCR, BRD-SocGen and Raiffeisen Bank Romania have completed the transaction to become shareholders in Bucharest-based CIT One, one of the largest local integrated services for the transport, processing and storage of cash and other valuables in Romania.