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Effects of US crisis on BVB

Bucharest, Sept 17 /Agerpres/ - The Bucharest Stock Exchange (BVB) severely felt on Tuesday the crisis on the international financial markets, having recorded its most dramatic daily drop in the latest three and a half years, due to the collapse of certain shares in the financial sector.

Thus, the BET index of the ten most important companies listed on the BVB lost 7.1 percent, that is the most significant daily drop since March 2005. Moreover, the BRD (Romanian Development Bank) shares, with BRD being the largest bank in the system listed on the BVB, dropped by more than 13 percent, while Broker Cluj and Biofarm Bucharest lost each more than 13 percent.

The drop in the BET index could have been even more significant in the context the Banca Transilvania shares hadn't been suspended from trading. SIFs lost almost 9 percent.

'Practically, the crisis already happened here too. Analysts considered that when the bankruptcies would start to happen there is a chance the international crisis to end too, which might result in the stock exchanges both local and foreign stoping from falling,' Adrian Ceuca, deputy general manager with Broker Cluj said.

The Bucharest Stock Exchange (BVB) recorded the most significant drop in the region, after the shock in the US, according to Business Standard.

On the other hand, brokers say the drops on the Romanian stock exchange market in the latest days would have happened anyway, even in the context the investments banks Lehman and Merrill Lynch had survived.

According to analysts, the capital markets might record such severe drops in the next interval too, with the most sensitive to fluctuations to be the banking sector, followed by the investment companies sector. 'New shocking sales waves are anytime possible. I expect the most voulnerable to such shocks would be the SIFs and also the bank issuers, as it happened on Tuesday in fact,' Alin Cucos, analysts with the brokerage company Estinvest said.

Authorities on the capital market in Romania say they are concerned with the crisis on the international markets, expecting a new shock wave.

'Taking into account that the domestic capital market is a component of the European market, the impact felt by the Bucharest Stock Exchange is a normal one. We consider the negative impact not to be one to last,' Gabriela Anghelache, Chairman with the National Securities Commission (CNVM) told Ziarul financiar daily on Tuesday.

What will happened next on the banking market? 'It is too early to evaluate now the possible effects of the international crisis on the local plan. We need more time for that, we need to see first how the local banks and the population manage to deal with the problems,' Valentin Lazea, chief-economist with the BNR (National Bank) told Ziarul financiar daily.

Local banks are quite dependent on the financing attracted from their foreign shareholders, in the context the credits exceed the attracted deposits from the customers by more than 10 billion euros.

'The effects will be seen, first of all, on the national currency exchange rate, with the leu to depreciate because of the aversion of the investors when it comes of risk. It is quite possible for us to see an exchange rate of 3.8 lei for an euro, and maybe even a higher one. Nevertheless, the same possibility exists the leu to strengthen,' Alexandru Chidesciuc, senior economist with ING Bank Romania told Business Standard.

He also appreciated that all such emergent currencies might be affected, due to the US investors repatriating their profits and liquidating their investments so as to take the money back to the US. 'Such emergent currencies become weaker, with the US dollars growing, but nevertheless with such growth cannot continue forever, as the situation in the US is quite worse,' Chidesciuc.

The senior economist with the ING Bank Romania also said that, besides the impact on the exchange rate of the national currency - leu- there might exist also such effects on the banks, due to he credits the parent-banks grant to their branches in Romania becoming more expensive.

A similar opinion was voiced also by the banking analyst Bogdan Baltazar, former Chairamn with the BRD (Romanian development Bank) - Societe Generale. he added that an increase in the interest at credits and banking deposits might take place.

'Such financial difficulties the large financial institution in the US which are in a way or another present on the Romanian private pensions market too do not affect the private pension funds or the contributions of the participants,' official of the Supervisory Commission for the Private Pension Fund System (CSSPP) said.

They also added that the money from the pension funds' accounts in Romania are safe and cannot be affected by such problems the manager of the fund might have, as there exists 'a clear separation' of the assets of the funds from such assets of the managers. AGERPRES

 

Sursa: http://www.rompress.ro/

Tags: might market banks romania effects exchange bvb crisis bucharest stock euro ing brd bet bnr

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