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Bucharest Stock Exchange Weekly Review 21-25/09/2020

posted onSeptember 26, 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 Romanian capital market became Emerging Market according to the classification of the global index provider FTSE Russell. The promotion of Romania to the Emerging Market status after 25 years from the re-establishment of the local stock exchange represents an unprecedented success.

The benchmark BET index, which includes the most traded 17 companies except for the Financial Investment Companies (SIFs), slumped 2.46% to 8,891.59oints. The BET-TR index, which also includes the dividends offered by the companies from the BET index, also plunged 2.46% to 14,813.99 points.

The BET-FI index, which tracks the five SIFs and the property restitution fund Fondul Proprietatea, depreciated by 1.91% to 41,988.96 points. The BETPlus index shrunk by 2.45%, to 1,331.84 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 business news, Bucharest, Ilfov, Timis are Romania’s most powerful counties by companies’ turnover, a KeysFin analysis found. Mehedinti, Caras Severin and Vaslui are the most weak counties by 2019 turnover of registered companies. 

On Tuesday the BET index climbed 1.44% to 9,019.56 points while the BET-TR also rose 1.44% to 15,027.20 points. The BET-FI index advanced 1.27% to 42,521.24 The BETPlus gained 1.45% to 1,351.14 points.

In politics, Romania’s parliament voted to raise all state pensions by 40%. The 40% hike was first approved last year by the then ruling Social Democrats (PSD), which remain parliament’s biggest party. The now ruling Liberal Party PNL voted against the amendments proposed by PSD. The hike comes just five days ahead of the local elections on Sept. 27 and two months ahead of the December 6. parliamentary elections. 

The National Bank of Romania (BNR) in its quarterly report said the country’s major macroeconomic challenge starting 2021 is adjusting its budget deficit and macroeconomic imbalances as international markets are unlikely to accept large deficits for years to come.

On Wednesday the BET index moved up 1.01% to 9,110.46 points while the BET-TR rose 1.01% to 15,178.64 points. The BET-FI index was higher by 0.44% to 42,706.63 points. The BETPlus gained 0.97% to 1,364.19 points.

In business news, the turnover of small and medium-sized enterprises (SMEs) in the country dropped 13.85% in August compared with July, 3.76% lower compared with August 2019, according to a barometer released by SmartBill.

On the real estate front, just 13.4% of the 9.1 million residential units in Romania were built in the last 30 years, a Cushman & Wakefield Echinox report showed.

In banking news, the supervisory board of BNR gets a new management: As of October 1, Adrian Cosmescu will become board chairman and Nicolae Catalin Davidescu deputy chairman.

Private lending in Romania grew 0.9% in August compared with July, to RON274.49 billion, BNR data showed.

On Thursday the BET index decreased by 0.87% to 9,030.78 points while the BET-TR fell 0.87% to 15,045.90 points. The BET-FI index ticked down 0.01% to 42,703.77 points. The BETPlus weakened 0.86% to 1,352.41 points.

In investing news, the net assets of the 223 domestic and foreign open-end and closed-end investment funds operating in Romania decreased by 1.6% in August, to RON42.3 billion (EUR8.8 billion), dropping 14.4% since the beginning of the year, according to the Association of Fund Administrators.

On Friday the BET index dropped 0.77% to 8,961.59 points while the BET-TR declined 0.77% to 14,930.62 points. The BET-FI index lost 0.39% to 42,537.47 points. The BETPlus was off 0.74% to 1,342.43 points.  

In currency trading news, analysts polled by CFA Romania see the Romanian leu to depreciate to an average of 4.97 to the euro in the next 12 months. 

In labour market news, Romania’s unemployment rate grew to 5.4% in the second quarter of 2020, 4.3% in the first quarter, data from the National Institute of Statistics (INS) showed. The net average salary in the country increased by 13% in 2019 compared with 2018, to 2,986 lei (around EUR612), INS said.

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:

  • The Board of Directors of Romgaz Medias approved the establishment of a new branch within S.N.G.N. ROMGAZ S.A, in the city of Drobeta Turnu Severin, county of Mehedinti.
  • OMV Petrom has revised its medium and long-term oil and electricity price assumptions leading to net impairments of around RON350 million after tax in the third quarter.
  • The Board of Directors of TeraPlast Bistrita on Wednesday re-elected Dorel Goia as Board Chairman, for a 12-month period, until September 14, 2021.
  • Romania’s Competition Council has cleared BRD and Raiffeisen Bank to join shareholding structure Of CIT One SRL, together with Banca Comerciala Romana SA (BCR), on condition that the three lenders observe the commitments undertaken.