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BET Index plummets to December 2004 level

BET Index, which follows the evolution of the top 10 companies listed on Bucharest Stock Exchange (BVB), excepting SIFs, has plummeted on Monday below the level at the end of December 2004. As such, the 58 percent decline recorded since the year-start on BET wiped out the advance of 125 percent recorded over 2004-2007.

Shares of the biggest company on BVB, Petrom, went down on Monday to a minimum of 0.3 lei/share, price never seen since December 2004, Petrom's market value dropping to 4.5 billion euros.

As well, some other important oil companies, such as Rompetrol Rafinare, real estate developer Impact, medicine producer Sicomed and aluminum producer Alro Slatina, slipped below the levels their stock was traded at the end of 2004.

Those steep declines circumvented no one and the most affected were the shares in the financial sector, respectively SIFs, Broker and BRD.

The main bourse indicators deepened losses on Monday and the market saw vanishing 1.4 billion euros.

'Massive sales we assist to these days signal that the investors have finally capitulated. Listed companies financial results do no longer count or if one sells on the red, investors preferring 'to jump overboard'. This year is surely a missed one for the capital market', Radu Hanga, director general of investment administration company BT Asset Management is quoted as saying by Ziarul financiar daily.

As well, brokers maintain that, currently, there are no prospects as for an improvement of the situation on the domestic and international markets, which make many investors eager to sell, even on the red, in order to minimize the losses, in the context in which there is the risk the situation could even go worse.

'It is hard to believe that there is someone selling for gain', says Adrian Ceuca, deputy director general of Broker Cluj.

He thinks that, in case the law on 50 percent higher salaries for educational staff is passed, the specialized international agencies will reduce Romania's rating.

On the other hand, brokers believe that investors' attention was also focused in the past days on the events in the country, an increasingly number of people speaking about the economic risks supposed by salary increases passed by the Parliament at the end of last week.

'There is panic on the market. Signals from abroad are not positive yet and those on the domestic market are more negative than ever. One cannot talk about salary increases of 50 percent, when all the people abroad are stressed because the global economy is seen as slipping into recession. This is a kind of irresponsibility which might push down Romania to the level in 1998, when inflation stood at 20-25 percent', says Octavian Molnar, deputy general director of IFB Finwest.

As well, he appreciates that there are risks linked to the Romanian banking system, even though, up to now, it proved more resilient in front of the crisis by comparison to some other states. 'Financial system in Romania still looks good compared to what is happening abroad, provided there are no hasty withdrawals from the banks. I have never seen so much panic and stress', underlines Molnar.

'I failed to believe the rating agencies predictions on a sudden landing of the economy, but at this moment this scenario looks real', IFB Finwest representative also said.

Razvan Pasol, president of Intercapital Invest, thinks that, in an optimistic scenario, a Stock exchange recovery would be likely only in the second half of the next year. 'Negative perception leads to declines on the market, even though financial results of the companies reflect attractive fundamental indicators. We must consider the reason of those declines and I cannot believe someone imagines that the international crisis will be over till this year-end', explains Pasol.

The equity funds were in their turn strongly influenced by the turmoil on the financial markets, they posting losses of 60 percent in the first nine months of the year.

Sursa: http://www.rompress.ro

Tags: percent market bet level december there bvb brd

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