Most analysts say that in the following months tension will still be there, but they believe the effects of investors’ panic will wane in time and they will gather the courage to reenter the market should the international situation also allow it.
Autumn is traditionally a period when investors return to stock exchanges after the holiday period, which is likely to bring an inflow of fresh capital on the bourse. “We’re now coming after panic on the bourse and we may still see some increases,” says Andreea Gheorghe, general manager of SAI Intercapital Investment Management.
She believes that the significant discount registered by many Romanian stocks is not explained only by the small size of the market, but also by the image problems it has been coping with after the failed Petrom (SNP.RO) stock offering and by the slow pace of its development.
Mihai Caruntu, head of the capital market research department at Banca Comerciala Romana, believes that in the basic scenario, including anemic growth of mature economies, bourses of south-eastern Europe are appealing, particularly through valuation indicators and the low indebtedness of member states.
“Our bourse shows undervaluation. Many stocks are traded at a value of 60-70% of assets. This is why we have the conditions to end the year above the values seen at the start of the year. I believe mature economies will not stall, but post softer growth,” Caruntu says.
According to him, all the liquid stocks on the bourse are looking good in terms of valuation indicators, but he believes Fondul Proprietatea (FP.RO) shares have most growth arguments for the following period.
“It’s quite difficult to make forecasts at this moment, but I expect international markets to stabilize and thus create the conditions for the Bucharest stock exchange to recover losses seen in the past two months,” says Mihai Alexa, an analyst with Broker Cluj brokerage. “There are many companies that have managed to reach high profitability this year, even a five-year high in some cases.
Despite international market tensions, I can hardly find any reasons for declines.”
According to him, industrial and pharmaceutical stocks are favorites given the solid results registered this year.
(English version by Catalina Apostoiu; Editing by Loredana Fratila-Cristescu)