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In a desperate move to stop the crisis, Central Banks cut interest rate

In Romania, Bucharest Stock Exchange and SIBEX suspended yesterday the transactions because of the massive falls.

11.08 h. This is the time when Bucharest Stock Exchange (BSE) decided to suspend the transactions, after the fall of the value of the shares to the threshold of 15 per cent, Agerpres informs. The Commodity Exchange from Sibiu stopped immediately the transactions. Thus, the quotations of the financial investment companies dropped 14.64 per cent on Wednesday morning, about one hour and a half after the opening of the session, while the general index of the market BET-C registered a depreciation of 10.23 per cent. BET index, which reflects the evolution of the most liquid 10 listed shares, was falling by 9.34 per cent. BSE liquidity doubled in only one hour on Wednesday morning. If around 10.30 h. the liquidity exceeded one million Euro, before the closing of the Stock Exchange the liquidity of the market amounted to EUR 2.54 M. The most liquid titles were SIF 5 Oltenia, BRD, SIF 2 Moldova, SIF 3 Transilvania and Erste Bank. The only company listed with the Stock Exchange which registered appreciations of the quotations is Electrocontact, whose transactions were growing by 0.4 per cent. As soon as BSE suspended the transactions, the Stock Exchange from Sibiu also decided to suspend the transaction of the derivatives. "This morning (yesterday - editor's note), the market from Sibiu suspended the transaction of the derivatives having as active support the share listed by the Stock Exchange from Bucharest, as a result of BSE's decision to suspend the trading session," declared Darius Cipariu, deputy manager Sibex. He explained that the suspension was applied in the transactions with derivatives on shares, but the trading of the derivatives on the foreign exchange rates of the Euro, Dollar and Swiss Franc remained open. The situation of BSE is influenced chiefly by the negative international context, according to a report of Banca Transilvania Asset Management (BTAM).

BSE president, Stere Farmache, requests prudence

The trading on Bucharest Stock Exchange will be resumed on Thursday, in the conditions in which the signals on the foreign exchange market do not suggest panic, BSE President, Stere Farmache, declared in a press conference, quoted by Agerpres. "In the conditions of a high volatility in the market, the investors mush show prudence, but no more than necessary. The signals in the foreign exchange market do not suggest a state of panic, and thus the Stock Exchange must function subject to substantiated, not emotional, feelings," Stere Farmache added.

Stocks tumble despite Government crisis moves

Stock markets across the world plunged on Wednesday as concerns about the worst financial crisis in nearly 80 years and fears of a global recession gripped investors despite government efforts to intervene. MSCI's main benchmark index of world stocks was at 4-year lows, down 3.5 percent, and its emerging market stock counterpart fell 7.3 percent. The pan-European FTSEurofirst 300 index tumbled 5.75 percent and Tokyo's Nikkei share average plummeted 9.4 percent, the largest single-day percentage decline since October 1987. Government debt prices jumped as the equity selloff reached fever pitch and investors snatched anything resembling stability, such as gold which rose more than 2 percent and the Japanese yen. "The deteriorating outlook for the economy and the deepening financial crisis are pushing fears to their limit," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management in Japan. The sharp market moves came despite efforts by various authorities to inject calm and money into the battered financial system. Britain unveiled a multibillion pound rescue package for British banks that included plans to inject up to 50 billion pounds (USD 87.84 BLN) of government money into the country's biggest operators. It was designed to offer banks short-term liquidity, make new capital available and give the banking system enough funds to maintain lending in the medium-term.

Russia share trade suspended for two days

Russia's most liquid stock exchange, the rouble-denominated MICEX, suspended trade for two days after blue chips posted double-digit losses in the first 35 minutes of trade, tracking hefty losses on Wall Street. Overnight interbank lending rates spiked to nearly 9 percent as investors turned to the money markets to raise cash. Both the MICEX and the dollar-denominated RTS exchange were suspended from 1105 local time. The RTS said it would resume trade on instructions from the Federal Financial Markets Service, the stock market regulator. "From a market point of view, they (the exchange) had to get a sense of the (trading) situation," a trader at a major Russian bank said. "Closing it was justified, although it was probably not justified to open it in the first place. "Regulators have stepped in to delay or suspend trading in Russian equities regularly in recent weeks.

The losses on stock markets this week have been huge. MSCI's world index, a gauge which many investors use to judge their performance has already lost 12 percent since Friday's close and is on track for its worse week in the 20 years it has been in its current form.

Oil touches 10-month low, demand seen falling

Oil touched a 10-month low and was down by around USD 3 a barrel on Wednesday as expectations mounted that the worst international financial crisis since the 1930s would have a major impact on demand for fuel.U.S. light crude for November delivery was down USD 2.87 at USD 87.19 a barrel by 1032 GMT. Earlier it had fallen by more than USD 4 to USD 86.05, its lowest level since Dec 6, 2007. London Brent crude fell by USD 2.56 to USD 82.10 a barrel. The slide was in line with weakness across financial markets, which registered deep losses even after British Prime Minister Gordon Brown and Finance Minister Alistair Darling held a joint news conference to outline a 50 billion pound (USD 87.84 billion) rescue package for British banks. Darling said he wanted to reduce the "fear factor" in the banking system, but it was not enough to stop Britain's top share index, the FTSE 100, from falling.

IMF to cut global growth forecasts

The International Monetary Fund is set to cut its global growth forecasts and sees major uncertainty in the outlook for the world economy, German Deputy Finance Minister Joerg Asmussen said on Wednesday. Asmussen also said he welcomed Britain's bank rescue plan, saying it would help financial stability in Europe. "We welcome this approach from the British government because it contributes to the stability of the British financial system and we know what importance that has for the European financial system," he told reporters. The International Monetary Fund on Tuesday increased its estimate of global losses from the financial meltdown to USD 1.4 trillion and warned that the world's economic downturn was deepening.

Romania's banking system does not have liquidity problems

BNR assures that the deposits of the population are not in danger. The banking system from Romania does not have problems of liquidity, declared yesterday for Agerpres the spokesman of BNR Mugur Stet. According to him, "the National Bank still attracts from the commercial banks their surplus of liquidity," which proves clearly that the commercial banks do not have problems of cash. According to the Guarantee Fund of Deposits in the Banking Systems, 99.2 per cent of the deposits made by the population in the banking system are now up to EUR 20,000, which means that they do not exceed the limit until which they are guaranteed by the Fund. "The population has at its disposal other forms of investments as well, and if they want deposits others than the deposits in the banking system, they can do it. If we refer strictly to the deposits from the banking system, almost all the deposits are guaranteed now. Thus, there isn't any problem. Moreover, the banking system from Romania does not have problems of liquidity," Mugur Stet said.

The current moment exerts pressure on Romania, because of the international crisis, of the internal legislative circumstances, of the elections, of the salary rises and of the project of the law regarding the 2009 budget. The current level of taxation is optimum, because it harmonizes the interests of the employees, owners and state, the economy and finance minister Varujan Vosganian declared on The Money Channel.

ECB cuts rates by 50 bps in coordinated move

FRANKFURT- The European Central Bank cut interest rates on Wednesday for the first time in more than five years as part of coordinated action with other major central banks to shore up the global economy.The ECB cut its benchmark rate by 50 basis points to 3.75 percent, the first rate cut since June 2003 and sooner than analysts and markets had expected."The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability," the ECB said in a statement. "Some easing of global monetary conditions is therefore warranted." The ECB left interest rates on hold at its last meeting on Oct. 2 but ECB President Jean-Claude Trichet opened the door to lower rates when he revealed policymakers had discussed a cut and now thought inflation risks had eased, although not totally disappeared. The ECB said the decision was taken after a teleconference, which is similar to the decision to cut rates in tandem with the U.S. Federal Reserve on Sept. 17, 2001, when the ECB slashed its benchmark rate by 50 basis points in the wake of the Sept. 11 attacks in the United States.

BNR announces a RON 0.004 drop in reference rate, to 3.9233/euro

By midday yesterday, the home currency had recovered some losses registered early, and the National Bank of Romania (BNR) announced a reference rate of RON 3.9233/euro, down RON 0.0044 from Tuesday's. Early in the day, the exchange rate stood at RON 3.9450 - 3.95/euro, up nearly RON 0.03 from closing, the day before. Later on, the rate started declining slightly, to RON 3.9250 to 3.93/euro, amid a higher demand for euros on the market. Around 10:20 am, 1 euro was trading at RON 3.93 - 3.9325. The RON appreciated significantly against the euro, following the announcement by several banks that they would cut down. The reference interest by 0.5 per cent, with the exchange rate reaching a low of RON 3.8550/euro by 2:15 pm.

 

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Tags: investors government markets international rates crisis trading global percent losses deposits banking british since system liquidity euro stock exchange suspended romania interest central banks which transactions after index market wednesday financial bnr sif blue bet brd

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