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 theweek. 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), dropped 0.14% to 10,321.38 points. The BET-TR index, which also includes the dividends offered by the companies from the BET index, also fell 0.14% to 17,377.36 points.
The BET-FI index, which tracks the five SIFs and the property restitution fund Fondul Proprietatea, lost 0.13% to 44,659.21 points. The BETPlus index declined 0.14%, to 1,541.16 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 508.8 million lei (EUR104.2 million), selling bonds maturing in October 2034, at an average yield of 3.27%, National Bank of Romania (BNR) data showed.
In other capital markets news, an initial public offering of a minority stake in Romanian hydropower group Hidroelectrica, the most valuable state-owned company, could take place towards the end of 2021 in the best case scenario, the company's CEO, Bogdan Badea, said during a BVB event on Monday dedicated to the 10th anniversary of Fondul Proprietatea listing at the local bourse.
On the macro side, Romania rolled out the lowest government support package to fight the effects of the Covid-19 crisis in the Central and Eastern Europe region (just 4% of GDP) according to a report by ratings agency Moody’s.
On the banking front, Romania's three-month ROBOR index, the interbank interest rate used as a reference to calculate variable interests for loans in lei contracted before May 2019, dropped to 1.58% a year on Monday (Jan 25), the lowest level since September 29, 2017, BNR aggregate data showed.
In labor market news, the unemployment rate in Bucharest stood at 1.28% in December 2020 with 15,251 jobless people (of whom 8,167 women), Bucharest Municipal Employment Agency data showed.
In real estate news, land deals for residential and retail developments kept the market at over EUR300M last year, Colliers Romania said. However, the consultancy specified that real estate developers either did not buy land for office space projects or postponed such plans.
On Tuesday the BET index gained 0.19% to 10,341.02 points while the BET-TR also climbed 0.19% to 17,410.40 points. The BET-FI index rose 0.07% to 44,692.61 The BETPlus was up 0.18% to 1,543.87 points.
On the macro front, most analysts polled by CFA Romania see the inflation rate growing to an average rate of 2.64% in the next 12 months and the leu depreciating to an average of 4.98 units to the euro.
Meanwhile, in the minutes of its latest monetary policy meeting, the BNR warned that the annual inflation will probably inch up in the first two months of 2021, followed by a correction at the end of the first quarter of the year. The comments come after the liberalization of the electricity market in the country, a process with significant uncertainty that may impact inflation, according to the central bank.
On Wednesday the BET index declined 0.18% to 10,322.04 points while the BET-TR also fell 0.18% to 17,378.47 points. The BET-FI index lost 0.35% to 44,535.08 points. The BET Plus weakened 0.18% to 1,541.08 points.
On the banking front, private lending in Romania increased by 0.5% in nominal terms and 0.1% in real terms in December to RON282.37 billion, month-over-month, BNR data showed. In currency news, at end-December 2020, broad money (M3) amounted to RON 487,450.5 million, up 2.1 percent (1.8 percent in real terms1 month on month and 15.3 percent (13.0 percent in real terms) year on year, according to the central bank's data.
In business news, the M&A activity in Romania took a hit due to the Covid-19 crisis, with transactions postponed and uncertainty rising, a KPMG survey showed. However, there is increased optimism among stakeholders who expect further growth on this field this year.
On Thursday the BET index depreciated by 0.14% to 10,307.95 points while the BET-TR also lost 0.14% to 17,354.77 points. The BET-FI index moved up 0.29% to 44,665.75 points. The BETPlus dropped 0.16% to 1,538.62 points.
On the macro front, Romania's GDP grew 4.1% in 2019 year-over-year, semi-final data from the National Institute of Statistics (INSEE), confirmed. Romania ended 2020 with a deficit of RON101.92 billion in 2020, or 9.79% of the gross domestic product, finance ministry data showed.
On the banking front, the government adopted an extension of a 9-month loan repayment moratorium for debtors affected by the Covid-19, after the previous moratorium expired at the end of 2020.
Of note, Romania was one of the busiest markets in Central and Eastern Europe in terms of banking sector mergers and acquisitions, with three transactions in 2020, according to the Deloitte CEE Banking M&A study. Deloitte expects the banking sector consolidation in CEE to increase.
In real estate news, the property investment volume in Romania stood at approximately EUR900 million in 2020, up 30% y-o-y, according to a report by real estate consultancy JLL.
On Friday, the BET index ticked down 0.01% to 10,306.47 points while the BET-TR also ticked down 0.01% to 17,352.34 points. The BET-FI index gained 1.04% to 45,128.61 points. The BETPlus was up 0.01% to 1,538.71 points.
In fixed-income markets, Romania raised RON995 million selling bonds to the general population this month, the biggest monthly amount investors subscribed since the start of the program
On the macro front, experts of KeysFin expect the Romanian economy to grow by 2.5% to 3.5% in 2021. In business news, CITR, the leading insolvency practice company said that in 2020 insolvencies were fewer but had higher impact.
Another tragic event took place on Friday. Romanian officials said at least five people have died after a fire broke out in Matei Bals hospital in Bucharest where Covid-19 patients were being treated. The Health Ministry has suggested the fire could have been caused by an electrical short circuit.
The tragedy came in less than three months when10 people died in a fire in an intensive-care unit of a hospital in the northeastern town of Piatra Neamt.
(BVB's BET index performance Friday 29/01/2021 Graph Source: BVB)
BET INDEX CONSTITUENTS
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
- Conpet plans to increase its share capital by RON108.8 million. The shareholders of the state-run oil transporter will be discussing the issue in their general meeting on March 11.