Bucharest stock exchange indices fall in 2022 as international uncertainty takes its toll

Bucharest stock exchange indices fall in 2022 as international uncertainty takes its toll
The performance of the Bucharest Stock Exchange's main BET index over the last six months. / Bucharest Stock Exchange
By bne IntelliNews June 16, 2022

Most of the Bucharest Stock Exchange (BVB) indices ended the first five months of 2022 in negative territory, as international uncertainty took its toll on the Romanian market. 

Romania had been recovering from the coronacrisis when Russia invaded Ukraine in February. Like other markets in the region, the country, which shares a border with Ukraine, has been affected by the uncertainty following the outbreak of war. 

According to the BVB’s monthly report for May, the main BET index, comprising the 20 most traded companies listed on the BVB, stood at 12,509 points at the end of May, 4.2% below the level at the end of last year. 

The BET-TR index, which includes dividends from BET companies, ended May at 23,072 points, down by 0.2% from the end of 2021. 

“Last year was a record year for BVB, we had 23 companies that came to the stock exchange, and this year we already have 9 newly listed companies. We also notice a greater representation of the stock market in the daily life of Romanians: almost 90,000 people already make transactions on the stock exchange through an authorised broker,” said BVB President Radu Hanga.

“The Romanian Stock Exchange demonstrates that it has the ability and the strength to contribute to the economic development of Romania, whilst consolidating its status as a solid and efficient financing platform for the state and for private companies and representing an intelligent saving alternative through the degree of diversification it offers to investors.”

Meanwhile, there were more transactions on the exchange in May almost 118,000 or 44.6% more year on year but the size of the transactions was smaller, with the monthly trading value on the share segment down by 2.5% y/y.  The average daily value of transactions in the share segment fell by 11.3%. 

"The investors present on the Bucharest Stock Exchange have adopted a wait-and-see attitude in a rather complicated regional and global context. However, more transactions took place but at a lower trading value, which indicates that there is an expectation to see a series of much clearer signals that validate or not the investment strategy. Those with a long investment horizon benefit from the current context,” said Adrian Tanase, BVB CEO.

In a more positive sign, the number of investors continued to rise, with almost 90,000 Romanian investors trading on the local stock exchange in the first quarter.

Hanga commented that the profile of the exchange is still rising, while Tanase said the exchange has become more interesting for local investors. 

“The stock exchange has become a much more appealing platform for the Romanians’ savings because the offer of companies listed on BVB has become more and more diversified. In addition to financial and energy companies, we see a very good representation of listed companies in the field of technology, but also construction materials or agriculture,” Tanase said.