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Sunday, November 19, 2017 
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What you should know before the opening bell

2/22/2017

  • BET index closes at 8,035 points, the highest value since January 20, 2008
  • BET-TR goes up to 9,925 points, continues rally to 10,000 points
  • Ludwik Sobolewski, BVB CEO: Romania is leaving the territory of low valuations and low trading activity

 

Double-digit growth rates return to market as investors regain optimism amid improved macroeconomics, strong dividends and positive corporate financial results. The Bucharest Stock Exchange (BVB) saw the two key indices, BET and BET-TR, surge by about 13.4% each in just 8 weeks. The BET index, which includes the top 10 most liquid shares of the companies listed on the local market, closed on Wednesday at 8,035 points, the highest values since January 20, 2008.

"As the result of consequent modernization of the capital market, its growing openness to international flows of capital, its attractiveness to domestic investors, Romania is leaving the territory of low valuations and low trading activity," said BVB’s CEO Ludwik Sobolewski.

BVB’s other indices: BET-TR, BET-XT, BET-XT-TR and BET-Plus have also reported historic record values. BET-TR index, which reflects the evolution of the most ten liquid shares listed on BVB included in the BET and dividends distributed to shareholders of these companies, closed on Wednesday at 9,925 points, 13.4% higher than the end of 2016, continuing its rally to 10,000 points.

"Investors are now rewarded for their trust in the capital market. The market shows an outstanding dynamics as it exceeded in just eight weeks the level even the most optimistic analysts had predicted for the end of the year. We believe the macroeconomic evolution far above the economic growth within the European Union, the payment of consistent dividends following the positive yearly financial results and the perspective to upgrade Romania to the Emerging Market status, grounded investors’ optimism," said BVB’s chairman Lucian Anghel.

"The returns obtained from the dividends and share prices neared 30% in the last three years if we take into account the evolution of the BET-TR index, to which it adds up about 12% in less than two months," Anghel added.

Romania had the biggest dividend yields in the world last year, a trend which is likely to continue in 2017, according to Carsten Hesse, EME Equity Strategist at Berenberg. "I did a conservative analysis and I can happily announce that it is going to be around 7% the yield again in 2017, while some companies will pay double digit figures as the Government wants state owned companies to pay at least 90% of their earnings," Hesse added at a conference organized by BVB this month. On its way to be promoted to the Emerging Markets status, Romania is getting closer to meet not only the criteria of FTSE Russell, but also those of MSCI, with three companies already fulfilling the requirements.