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Bucharest Stock Exchange Weekly Review 09-13/11/2020

posted onNovember 18, 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), surged 3.65% to 9,129.64 points. The BET-TR index, which also includes the dividends offered by the companies from the BET index, also jumped 3.65% to 15, 356.03 points.

The BET-FI index, which tracks the five SIFs and the property restitution fund Fondul Proprietatea, increased by 1.50% to 39,873.80 points. The BETPlus index soared 3.56%, to 1,365.38 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 RON400 million selling selling treasury bills maturing in May 2021 at an average yield of 2.32%, and 923.9 million lei selling bonds maturing in January 2028 at an average yield of 3.04, National Bank of Romania data showed.

In economic news, Romania posted a trade deficit of EUR13.1B In January-September 2020, up 8.3% compared with the same period in 2019, data from the National Institute of Statistics (INSSE) showed.
Europeans have an average per capita purchasing power of €13,894 in 2020, according to the newly released study “GfK Purchasing Power Europe 2020”.

Per capita purchasing power shows a nominal decline of almost 5.3 percent in 2020 compared to last year's revised value, which can be attributed mainly to the spread of COVID-19 and the resulting economic impact. Disposable income among the 42 studied countries varies significantly, with Romania ranking 31/42.

In retail news, local grocery store chains (held by local entrepreneurs) are growing faster than international rivals in Romania. Their sales grew 17% in May-October, which is the fastest rate of all according to market research company RetailZoom.

On Tuesday the BET index dropped 0.70% to 9,065.88 points while the BET-TR fell 0.71% to 15,246.69 points. The BET-FI index lost 0.40% to 39,714.13 The BETPlus was off 0.68% to 1,356.09 points. 

In economic news, the average net salary in Romania grew 1.4% in nominal terms in September 2020 to 3,321 lei (around EUR682), compared with the previous month, INSSE data showed.

London-based European Bank for Reconstruction and Development (EBRD) expects Romania's economy to contract by 5% in 2020 and sees slow recovery, with just 3% growth in 2021.

On Wednesday the BET index was lower by 0.17% to 9,050.07 points while the BET-TR was down 0.18% to 15,219.31 points. The BET-FI index was unchanged to 39,713.17 points. The BETPlus was off 0.19% to 1,353.58 points.

In economic news, Romania’s annual inflation rate decreased to 2.2% in October 2020, the least since September 2017, from 2.5 percent in the previous month, INNSE data showed.

On Thursday the BET index declined 0.80% to 8,977.75 points while the BET-TR also fell 0.80% to 15,097.79 points. The BET-FI index lost 0.09% to 39,678.97 points. The BETPlus depreciated by 0.79% to 1,342.85 points.

On the banking front, the National Bank of Romania (BNR) held its benchmark interest rate at 1.5% and cut the minimum reserve requirement on commercial banks' hard currency liabilities to 5% from 6%. The central bank sees inflation dropping further in the short term before rising again and remaining close to 2.5%.

In real estate news, Romania logistics space market sees record demand from retailers and logistics firms in 2020, Cushman & Wakefield Echinox data showed. The volume transacted is expected to exceed the 700,000 square meter threshold, against the backdrop of accelerated growth of online commerce and the positioning of Bucharest as regional logistics hub for many international retailers, the consulting firm said.

On Friday the BET index was off 0.75% to 8,910.13 points while the BET-TR dropped 0.75% to 14,985.13 points. The BET-FI index decreased by 0.44% to 39,504.69 points. The BETPlus was down 0.71% to 1,333.36 points.

In economic news, the Romanian gross domestic product contracted 6 percent year-on-year in the third quarter of 2020, after a 10.3 percent contraction in the previous period, and worse than market consensus of a 4 percent contraction, a preliminary INSEE estimate showed. Analysts expect Romania's economy recovering slower.

BNR lowered its inflation forecast to 2.1% for the end of 2020 from a previous projection of 2.7%, while keeping the 2021 projection at 2.5%.
Romania posted a current account deficit of EUR7.737B during the first nine months of 2020, BNR data shows.

In fixed income markets, investors bought RON0.5B worth of Fidelis government bonds for the general population in the first week of the offer running until November 27.


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:

  • Alro’s shareholders named  Eximbank as a coordinator of a syndicate of banks for a $235 million loan contracted in December 2015 and coordinated at that time by Raiffeisen Bank International. The aluminium producer posted a net profit of RON273 million during the first nine months of 2020, versus RON23 million loss in year-earlier period.
  • Sphera Franchise opened second Taco Bell restaurant in Brasov, within the AFI Palace shopping center, reaching 11 units in Romania. The Group posted RON4.7M net loss during the first nine months of 2020,  versus a profit of RON38.2 million in the same period in 2019.
  • The parent company of Bucharest Stock Exchange reported a consolidated net profit of RON7.9 million in January-September 2020, up 18% on the year.
  • Conpet ended the first nine months of 2020 with a net profit of RON48.95 million for in the January-September 2020, down 2.3% on the year.
  • Banca Transilvania reported a net profit of RON901 million in the January-September 2020, down 35% on the year.
  • Romgaz reported a turnover of RON2.9 billion, in January-September 2020 down 23% on the year.
  • MedLife’s turnover grew 8.4% to RON770M year-on-year in January-September 2020.
  • Electrica Group’s net profit soared 146% year-on-year to RON396 million during the first nine months of 2020.
  • Purcari Wineries revenues stood at RON53.4 million for the third quarter, up 5% on the year.
  • Transelectrica’s net profit doubled during the first nine months of 2020 to RON152 million, compared with the same period last year.
  • Transgaz reported a net profit of RON224.7 million in January-September 2020, down 9% on the year.