In just three days, corrections erased almost the entire gains accumulated in the last two weeks of August, when markets recovered from the biggest declines in two years recorded at the beginning of last month.
The regional investment funds (SIFs) were hurt the most in the last few days, recording declines of up to 9% because of significant exposure to the banking sector. On the European markets, banks suffered the largest declines, but in Bucharest, BRD Societe Generale (BRD.RO) shares lost only 3.3%, and Banca Transilvania shares (TLV.RO) lost 3.6% in the last three sessions. Shares of OMV Petrom (SNP.RO) lost a more significant 4.5%.
Brokers however say the new slumps recorded by Romanian shares are dictated exclusively by what is happening on external markets and that things will not calm down until countries come up with concrete solutions for the debt crisis.
“When we see less pressure from the debts on countries’ budgets, then we will we be able to see an improvement in the investment environment and markets returning to an upward trend. This is a time of extreme volatility, but one in which trends tend to be downward,” said Mihai Chisu, broker at IFB Finwest.
The current market uncertainty leads to certain shares being traded at much lower prices than would be expected considering the fundamental indicators and their financial results, with the context being favorable for long-term investments, over 3-5 years.
(English version by Daniela Stoican; Editing by Radu Bostan)