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Erste shares, an anchor to fight the leu depreciation on the Bucharest Stock Exchange

Erste group shares (EBS) were more profitable over the last week on the Bucharest market than in Vienna, due to the depreciation of the national currency, and the Austrian bank bonds could function as an anchor for the exchange rate, several brokers consider.

"If we talk about an advantage that Erste against other quotations on the market is the fact that Erste share could function as an anchor for the exchange rate. Practically, a Romanian investor who buyes a Erste share eliminates the hard currency risk" Adi Lupsan , deputy manager of the brokerage company Intercapital Invest said.

Thus, an investor bought EBS for short term, for one week only (5-12 January) on the Bucharest and Vienna market, the bonds would have a different dynamics. In Vienna, the banks' shares would register in only one week a depreciation of 5.87% from 15.51 euro/share to 14.60 euro. In exchange, over the same period in Bucharest the dynamics was positive, the bonds of the Austrian bank had an appreciation of 1.27% from 63 lei/share up to 63.80 lei. "The depreciation in Vienna cannot be seen in Bucharest as during this period the euro got stronger. If the rate keeps the same, we would have the same depreciation on the local market" Marcel Murgoci, manager of trading with EstInvest said.

During the analysed interval, at the reference rate of BNR lost 5.93% against the European currency, from a course of 4.0296 lei/euro on January 5, up to 4.2684 lei/euro during the session on Monday. As a result, "the Erste bank bought in Bucharest could cover some of the hard currency risk indirectly", Murgoci said. "The Erste share on the Bucharest market took over some of the depreciation of the national currency. At the same time, we have to consider the better evolution of the Romanian stock exchange against the other markets, but this is also due to the exchange rate, as the Romanian shares have become more attractive on the basis of the leu depreciation" Alin Brendea, vice-chairman of the Prime Transaction brokerage company said. Under the conditions of a stable exchange rate, a depreciation of the Erste quotation in Vienna leads to the same depreciation in Bucharest but if the leu lost its value on a short term, the depreciation on the local market could be less important or the evolution on the two markets, as it happened last week, could be divergent. "On a short term, we could say that Erste shares were more profitable due to the leu depreciation" Alin Brendea said.

Sursa: http://www.actmedia.eu

Tags: depreciation could currency share euro vienna market shares anchor bucharest erste exchange bnr