FOCUS: Romanian Shares Gain 24.6% In Mar, Best Performance In 50 Mos

The composite index of the Bucharest Stock Exchange gained 24.6% in March, the best performance in the last four years and two months, following the growth trend of the largest foreign markets.

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Hence, brokers say the bourse increase in March does not mean a trend switch.

In January 2005, the Bucharest Stock Exchange’s composite index BET-C was up 27.8%.

"We reached a point when any case-scenario is possible, namely the comeback may continue or we could further face a zigzag trend. Another case-scenario, a pessimistic one, accounts for no more growth and further depreciation. The growth reported in March was high but we should see whether this would continue, especially when it came after a long period of decrease," Razvan Pasol, general manager with brokerage company Intercapital Invest told MEDIAFAX.

In March, the BET-C index closed down only in seven trading sessions of the total 22.

Despite of the fact the market recovered part of the 34.53% downfall in the first two months of 2009, BET-C was still down 21.56% at the end of March compared with the end of 2008.

Thus, the market value of the companies listed on the Bucharest Stock Exchange is at 21.96 billion lei (EUR1=RON4.2348), RON5.14 billion lower than RON27.1 billion end-2008.

Octavian Molnar, deputy general manager of brokerage company IFB Finwest, said the shares increase does not mean the problems in the Romanian real economy are solved.

"The bourse has always anticipated the development of the real economy. Now, we must see whether the [financial] results are worse than the market anticipates, or better," Molnar added.

The significant appreciation of the Bucharest Stock Exchange was equally fueled by Romania’s agreement with the International Monetary Fund, which strengthened the foreign investors’ confidence in the local economy, brokerage company Eldainvest general manager Adrian Manaila said.

"The agreement has a positive effect on the investors. The funds will give Romania’s central bank more room to boost lending, which gives hope for the country to post an economic growth in 2009," Manaila said.

Last week, Romania agreed with the International Monetary Fund, the European Commission and other financial institutions a EUR19.95 billion economic program, of which EUR12.95 billion in a two-year stand-by arrangement from the IMF.

All in all, the market trend will be positive on short-term, on investors being influenced by the dividends announced by companies, as well as by the interest of some players to accumulate shares in SIFs, to take part in general stockholders’ meetings, Adrian Ceuca, deputy general manager with SSIF Broker said.

The bourse’s future trend will equally mirror the foreign market trend, Ceuca and Pasol both said.

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