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Bucharest Stock Exchange Weekly Review 11-15/01/2021

posted onJanuary 16, 2021

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), rose 0.70% to 10,073.41 points. The BET-TR index, which also includes the dividends offered by the companies from the BET index, also advanced 0.70% to 16,960.23 points. 

The BET-FI index, which tracks the five SIFs and the property restitution fund Fondul Proprietatea, dropped 0.18% to 43,714.73 points. The BETPlus index declined 0.71%, to 1,504.05 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 raised 681 million lei (EUR139.8 million), versus its RON600 million target, selling bonds maturing in January 2028 at an average yield of 2.74%, National Bank of Romania (BNR) data showed.

In economic news, Romania posted a trade deficit of EUR16.433 billion in January-November 2020, EUR908 million higher y-o-y, data from the National Statistic Institute (INSEE) showed. 

In business news, the mergers & acquisitions activity in Romania was stable in 2020, with 91 transactions, compared with 110 in 2019, Deloitte said in a report.

On Tuesday the BET index rose 0.97% to 10,171.42 points while the BET-TR also moved up 0.97% to 17,125.16 points. The BET-FI index ticked down 0.01% to 43,710.85. The BETPlus was higher by 0.94% to 1,518.17 points. 

On the macroeconomic side, Romania's GDP shrunk by 5.7% in the third quarter, according to a second reading from INSEE.

In regulatory news, Romania's Antitrust Body said it has fined the association of financial companies in Romania (ALB) and 16 member companies a total RON41.2 million (nearly EUR8.47 million) for breaching antitrust laws, by participating in an exchange of commercially sensitive information. 

In real estate news, the office market in Romania plunged 36% in 2020.  From a record level of 470,000 square meters registered in 2019, it fell to just 300,000 sqm,  JLL Romania said in a report.

On the investing front, the assets managed by the seven private pension funds operating on Romania's mandatory segment (Pillar II) stood at  RON75B in 2020.

On the macro side, Andrei Radulescu, macroeconomic analysis director at Banca Transilvania wrote that Romania’s GDP may grow 2.5% between 2020 and 2022, backed by a 6.7% increase in productive investments. The analyst also said that the household saving rate reached on average 16.9% (a record high) between January and September 2020.

In automotive industry news, car production in Romania dropped 10.67% y-o-y to 438,107 units in 2020, Romania’s carmakers association ACAROM data from showed.

On Wednesday the BET index climbed 0.99% to 10,272.00 points while the BET-TR also gained 0.99% to 17,294.46 points. The BET-FI index added 0.58% to 43,964.21 points. The BET Plus moved up 0.96% to 1,532.73 points. 

In currency trading, the Romanian Forex market ended 2020 with an average daily transaction volume of EUR1.47B, down 10.2% y-o-y, NBR data showed.

On the macro side, Romania postpones again setting a calendar for euro adoption due to heightened macroeconomic imbalances, the finance ministry said in a letter to parliament.

The country's current account gap widened to EUR9.763B in January-November, compared with a deficit of EUR9.655 billion y-o-y, BNR data showed.

In labor market news, the average net salary in Romania grew 2% in nominal terms in November 2020 m-o-m, to 3,411 lei (around EUR700), data from INSEE showed.

On the banking front, Romania's finance ministry has extended a nine-month moratorium on bank loan repayments for debtors affected by Covid-19, after the previous moratorium expired at the end of 2020. 

On Thursday the BET index increased by 0.36% to 10,309.15 points while the BET-TR also added 0.36% to 17,356.88 points. The BET-FI index moved up 0.35% to 44,118.39 points. The BETPlus climbed 0.36% to 1,538.20 points.

In economic news, Romania's annual inflation rate stood at 2.1% in December in line with the NBR's forecast, data from INSEE showed.

In real estate news, Romania registered the second largest decline in house prices in the European Union (-2.6%) in the third quarter of 2020, compared with the previous quarter, after Cyprus (-4.8%), data from Eurostat showed. 

On Friday, the BET index declined 0.95% to 10,210.81 points while the BET-TR also fell 0.95% to 17,191.28 points. The BET-FI index ticked down 0.01% to 44,115.27 points. The BETPlus was off 0.92% to 1,524.01 points. 

In monetary policy news, BNR slashed its policy rate by 25bps to 1.25%, aiming to support the economy amid the ongoing coronavirus crisis and a slowdown in inflation rate. 

On the investment front, the European Commission approved a EUR222M investment for water infrastructure in Ilfov County, the county that surrounds Bucharest. 

Bucharest Stock Exchange BET index

(BVB's BET index performance Friday 15/01/2021 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:

  • Nuclearelectrica announced that it would receive a non-refundable grant of $1.3 million from US-TDA that aims to fund the cost of services required in identifying and assessing new potential small and modular nuclear technologies (SMR) compatible nuclear sites in Romania. 
  • TeraPlast announced that the European Commission approved the sale of TeraSteel and Wetterbest to Kingspan Group. TeraPlast SA also announced the termination of the mandate of non-executive director Razvan Stefan Lefter, effective January 13, 2021. 
  • Fondul Proprietatea approved the extension of the duration of the Fund until December 31, 2031.