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The Romanian stock market goes up by 4.6 percent in April as investors positively re-evaluate the Romanian companies amid the COVID-19 pandemic

5/11/2020

  • The companies listed on the Bucharest Stock Exchange (BVB) went up by 4.63 percent last month, taking into account the issuers included in the BET index, which comprises the most traded 17 companies.
  • The largest monthly increase so far this year occurred as investors positively re-evaluated the Romanian companies listed on BVB as the coronavirus pandemic intensified.
  • Radu Hanga, BVB President:
    • There are opportunities in any crisis situation, and they become more obvious and are easier to track on the stock exchange. The companies that had high valuations just a few months prior have become even more attractive to investors. On top of that, the dividend yields paid by the Romanian companies are still appealing to investors.
    • The stock exchange can support the recovery of the economy and can be used to meet the financing demand coming from the state. Our goal is to consolidate the image of the stock exchange as the go-to financing platform for the Romanian state, which can issue bonds to target local investors or bring to market the companies from its portfolio, as well as for the Romanian companies that need to raise capital. All these instruments are available, they just need to be used.
  • Adrian Tanase, BVB CEO:
    • Reopening the economy and resuming the economic activities without taking into account the stock market can hinder considerably the chances of success. There is no significant project that cannot be launched on the local stock exchange at this point. Any serious strategy to relaunch the economy has to derive from here.
    • The best way to support the Romanian companies is to invest in them. Supporting the Romanian companies does not have to be a slogan, but a reality that can emerge from using the stock exchange. Any Romanian citizen who buys shares or bonds in the local companies listed on BVB contributes to the rejuvenation of the national economy. Do we want to support Romanian products and services? This is the question we should start from and invest in the companies that provide the transparency required by their publicly listed status.

 

The companies listed on the Bucharest Stock Exchange (BVB) experienced increases in April, despite being the first full month of voluntary shutdown of the economic system following the state of emergency, a measure adopted in mid-March as a strategy to defend collective health against the COVID-19 pandemic. The companies included in the BET index, which includes the 17 most traded companies listed on BVB, registered an increase of 4.63% compared to March. This has been the highest monthly growth rate so far this year, and it was possible after investors positively reassessed the Romanian companies listed on BVB in the context of the coronavirus pandemic.

"There are opportunities in any crisis situations, and they become more obvious and are easier to track on the stock exchange. The companies that had high valuations just a few months prior have become even more attractive to investors. On top of that, the dividend yields paid by the Romanian companies are still appealing to investors", said Radu Hanga, President of the Bucharest Stock Exchange.

The economic strategy of resuming, even partially, the activity in the shutdown sectors should be centered around the stock market. "Reopening the economy and resuming the economic activities without taking into account the stock market can hinder considerably the chances of success. There is no significant project that cannot be launched on the local stock exchange at this point. Any serious strategy to relaunch the economy has to derive from here", stated Adrian Tanase, CEO of BVB.

The role of the stock market in such a context has become synonymous with ensuring access to the vital capital for the survival of companies. "The stock exchange can support the recovery of the economy and can be used to meet the financing demand coming from the state. Our goal is to consolidate the image of the stock exchange as the go-to financing platform for the Romanian state, which can issue bonds to target local investors or bring to market the companies from its portfolio, as well as for the Romanian companies that need to raise capital. All these instruments are available, they just need to be used", added BVB’s President.

The increase of the stock market reported in April was also possible due to the base effect, after the Romanian capital market registered a decrease of 16.4 percent in March, thus following the trend that started in February and cascaded from foreign markets. At the end of the first four months, the Romanian capital market recorded a decrease of 20 percent as far as the BET index is concerned.

"The best way to support the Romanian companies is to invest in them. Supporting the Romanian companies does not have to be a slogan, but a reality that can emerge from using the stock exchange. Any Romanian citizen who buys shares or bonds in the local companies listed on BVB contributes to the rejuvenation of the national economy. Do we want to support Romanian products and services? This is the question we should start from and invest in the companies that provide the transparency required by their publicly listed status", concluded BVB’s CEO.

For the first four months, the Bucharest Stock Exchange saw the total traded value for all the financial instruments amount close to EUR 1 billion or 34% up, while the average daily trading volume amounted to almost EUR 11 million or 30% up.