Bucharest Stock Exchange ended yesterday the first nine months of a very weak year. Evolution of the Bucharest trading beating the worst case scenario, prices of the issuers regressing to 3-4 years ago. Together with specialists in the Romanian equity market, wall-street.ro framed a balance of BSE evolution in first three quarters of the year.

After the first nine months of this year, it is easy to notice that Bucharest stock market had the biggest slumps of all regional markets and even lower compared to emerging countries. Financial crisis swept off Romanian equity market, triggering major plummets of shares, investors’ exits and selling sprees.

“In 2007, shares floated at BSE were traded at fundamental indicators higher than countries in the region and investors’ fears allowed them to pay this kind of premiums in the account of future growth forecasted for many companies’ revenues. Today, the same investors acknowledged that Romania will certainly not be protected by any shield from financial and economic evolutions that shook up European markets, and cutting economic growth forecasts,” stated for Wall-Street, Antonela Badea, financial analyst with Vanguard.

2008 was one of the weakest years of share market in Romania. BSE evolution beat darkest forecasts and projections. Nobody thought we would go back 3-4 years, in terms of prices. The declines were sharper, but we must take into account also the past growths that exceeded by far the international ones. These are the main characteristics of an immature developing small-sized market,” Gabriel Necula, deputy operation manager in Prime Transaction comments.

We must consider the fact that European Union is Romania’s top exporter, therefore, certain economic fields will reel after this crisis. Yet, its psychological impact must not be underestimated, causing a blockage of real estate market, for instance, while the liquidity drought geared completion of trades that were based on international funds.

With all the record economic growth, there are still concerns that it will not last for too long. The domino effect is has taken hold in Europe, Antonela Badea said.

Since early this year, until yesterday’s session, indices’ quotations dropped over 50%. The declines were drastic, especially if there were only few large rebounds, too feeble to compensate the losses.

Thus, BET index that gauges the performance of ten most liquid shares of BSE lost 55% since the beginning of 2008, while composite BET-C plunged 50%. BET-FI the index of financial segment lost the record 66% since 2008’s first trading session.

The declines are mainly due to our stock exchange together with foreign markets evolution, as foreign investors pump biggest liquidity into the market as compared to local investors.

“This is caused by the tight correlation. However, involving local speculators in events evolution and the liquidity shortage have led to bigger slumps, than in developed markets. Everything was fuelled by a never-seen financial bubble that burst in USA that gripped international markets, denting investors’ sentiments,” Necula explained.

Translated and adapted by Camelia Oancea.