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Stock Exchange president: Investors' attention captured by foreign markets rather than by locally l

The explanation for the Bucharest Stock Exchange (BVB) low liquidity and the lately falling indices could be the higher influence exerted on investors by foreign markets - that have been following a falling streak - than by the growing trend of companies listed on the Romanian Stock Exchange, president of the Bucharest Stock Exchange Stere Farmache told a Capital Market Forum on Thursday.

'Investors' attention is captured by news about foreign markets and the evolution of foreign prices and they forget to analyze the fundamental factors that should determine prices, specifically the performance of the companies they invest in. The national and international market stand in a tight connection, but we suggest investors to pay attention to performance evolution in the first place,' said Farmache. A consequence of the investors' behavior on the Romanian market is that in Q1 2008 companies generated revenues by 60 pct higher than in Q1 2007, but saw profits by ten pct lower, added Farmache. Whereas in 2007, BVB had an average amount of trades was 21.5 million euro, the average amount of trades now stands at some 11 million euro, said the BVB representative. The Stock Exchange president cautioned investors to also take into account economic growth. He also mentioned that he met with the major actors on the market and with representatives of large investment funds and financial investment societies with whom he discussed the investors' behavior. As for the evolution of the Stock Exchange in the next period, Stere Farmache told Rompres that 'for the time being there is no solution to overcome the difficult period BVB is going through. In other cases, and for other stock exchanges, the turmoil lasted six to seven months. (...) I can say events are lying ahead this year, that will bring some life to the bourse, such as the initial public offerings for both Romanian and foreign companies, because Erste Bank's listing is no isolated case. Private and state-owned companies will be floated and we expect government stock to enter the market at the end of the summer,' Farmache explained. In the last week the local Stock Exchange underwent significant corrections and Stock Exchange indices hit two-year lows, matching the evolution of foreign capital market, that saw an important depreciation on the background of increasing pessimism over the situation of large world economies and the future of capital markets. Sursa: http://www.rompress.ro

Tags: stock exchange companies market markets farmache foreign president investors attention euro bvb

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