For instance, the shares of BRD-Groupe Societe Generale (BRD.RO) plunged 18% since the beginning of August, but on Friday they closed up, while the shares of OMV Petrom (SNP.RO) fell 21% since the beginning of the month, reaching new lows. And this despite the fact that BRD reported a profit decline in the first half, while Petrom’s results continued to rise.
The regional investment funds (SIF) were in turn hit hard because of significant exposure to the banking sector, with SIF Oltenia (SIF5.RO) shedding 25% of its value in August.
The shares of natural gas transmission company Transgaz (TGN.RO), a utilities company considered to be a defensive investment, fell 16% in the same period, although results remained at last year’s level.
“The [Bucharest Stock Exchange], although half-year results were preponderantly positive, with 70% of the companies posting net profit growth in the first half and around 70% of them likely to meet their budgeted revenue and spending targets, is correlated with the European markets. This is natural considering that our economy is dependent on the EU economy, with 75% of exports going to EU countries,” explains Dragos Darabut, analyst of Tradeville brokerage.
The market declines put an end to the wave of initial public offerings (IPOs) recorded in the first part of this year. Several American companies in the IT sector put off listing plans. Poland’s government is considering putting off the offering to sell shares of PKO, the largest Polish bank, after shares plunged 24% against April highs.
Under the circumstances, it is doubtful whether the share offerings planned for this year at Transelectrica and Transgaz will take place. The Government has the Petrom offering fresh in its memory – when it was unable to sell its shares for 0.37 lei (EUR0.09), On Friday, Petrom shares fell below RON0.3. (EUR1=4.2669)
(English version by Daniela Stoican; Editing by Radu Bostan)