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Bucharest Stock Exchange Weekly Review 02-06/11/2020

posted onNovember 7, 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 0.65% to 8,566.02 points. The BET-TR index, which also includes the dividends offered by the companies from the BET index, also rose 0.65% to 14,402.86 points.

The BET-FI index, which tracks the five SIFs and the property restitution fund Fondul Proprietatea, increased by 0.34% to 39,212.33 points. The BETPlus index was up 0.65%, to 1,282.62 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 currencies, Romania's foreign exchange reserves stood at EUR33.795 billion at the end of October up from EUR32.588 billion at the end of September, according to National Bank of Romania (BNR) data.

Meanwhile, Fitch has affirmed Romania's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' with a Negative Outlook, which reflects weakening public finance metrics due to pro-cyclical policies in recent years and the impact from the coronavirus pandemic on economic and fiscal performance, the rating agency said.

On the banking front, Romanians’ appetite for mortgage loans remains high. Consumers took out almost 1.26 billion lei (EUR260 million) worth of new mortgage loans in lei in September, the second highest level in the first nine months of 2020, up 4% compared to the same period in 2019.

On Tuesday the BET index rose 1.58% to 8,701.40 points while the BET-TR added 1.59% to 14,632.41 points. The BET-FI index advanced 0.19% to 39,284.90. The BETPlus gained 1.57% to 1,302.72 points. 
In real estate news, Romania’s modern retail space stock (shopping centers, retail parks and retail galleries) has topped 4 million square meters, but the market growth rate is expected to slow down in the coming period, Cushman & Wakefield Echinox said in a report.

On Wednesday the BET index was higher by 0.84% to 8,774.67 points while the BET-TR grew 0.87% to 14,759.45 points. The BET-FI index moved up 0.12% to 39,332.46 points. The BETPlus added 0.83% to 1,313.52 points.

In economic news, the remittances sent back home by Romanians working abroad reached EUR2.3 billion in January-August 2020, while foreign direct investments in Romania stood at EUR1.4 billon (adding intragroup loans) and EUR994 million if considering only capital contributions (and reinvested profit, as well).

In real estate news, the number of deals in Romania reached 83,675 in October 2020, 35.107 more than in the previous month, and 25,341 compared to October 2019, according data by the National Agency for Cadastre and Land Registration (ANCPI).

On Thursday the BET index rose 0.80% to 8,845.30 points while the BET-TR also gained 0.80% to 14,877.47 points. The BET-FI index ticked up 0.05% to 39,351.10 points. The BETPlus added 0.78% to 1,323.70 points.

In economic news, the European Commission sees Romanian economy contracting 5.2% in 2020, followed by 3.3% growth in 2021 and 3.8% in 2022, according to the EU’s executive arm’s autumn economic forecast.

On the banking front, Romania’s banking system profit reached RON4.5B in the first eight months of the year, BNR data showed. Meanwhile, lending increased by 5.4% on average. 

In other economic releases, retail sales in Romania grew 0.4% on the month in September and 1.7% when adjusted for seasonality and number of working days, as sales of non-food items increased by 5.3%, fuel sales declined 3.1% and food sales dropped 3%, data from the National Institute of Statistics (INSSE) showed. 

On Friday the BET index was off 0.42% to 8,808.33 points while the BET-TR dropped 0.42% to 14,815.52 points. The BET-FI index decreased by 0.17% to 39,283.18 points. The BETPlus was down 0.40% to 1,318.38 points.

In fixed income markets, Romania's finance ministry returns to the capital market launching the second issue of bonds in Lei and Euro for the general population, following the success of the public sale offer (IPO) conducted in August.

In corporate news, Orange Romania has signed a deal to acquire a 54% controlling stake in Telekom Romania Communications (TKR), one of Romania's leading fixed telecom operators currently 54% owned by OTE and 46% by the Romanian State. Orange will pay a total of €268m, on a debt-free, cash-free basis and subject to customary adjustments at closing, corresponding to a total enterprise value of €497m, based on 100% of Telekom Romania Communications and the convergent customer base.

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:

  • Romgaz said Romania’s Ministry of Economy, Energy and Business Environment transferred RON115 million for investments in the company’s electric power plant in Iernut, central Transylvania, Romania.
  • Fondul Proprietatea got Romania’s Financial Supervisory Authority’s (ASF) approval for its program to buy back 165 million own shares at RON1.39 per unit.
  • BRD Groupe Societe Generale, reported a net profit of RON719 million in January-September 2020, down 43% year-over-year.
  • TeraPlast has requested state aid of around EUR5.8 million for a biodegradable packaging unit which totals nearly EUR12 million.