Over the past year, it has gone up 44%, the highest increase in the region, fueled by the favorable international context especially in Europe, along with a dividend policy of the state-run companies in Romania.
Banca Transilvania (TLV.RO), the most traded stock part of the BET index, and the second most important after Fondul Proprietatea (FP.RO), reached a new all-time high on Friday and analysts expect a new acquisition that could turn the Cluj-based lender into the leading bank in Romania.
However, some analysts recommend caution, because the current trend resembles the events of 2007 when BET dropped abruptly from the all-time high of 10,800 points, which it has yet to reach ten years later.
“It’s relatively obvious there’s something that looks like a bubble,” says Rares Nilas, now a capital markets consultant after spending 20 years as a stock broker and witnessing all highs and lows of the Bucharest Stock Exchange. The BET has gone up 22% since the beginning of the year, the same as Austria’s ATX and higher than the Polish, Czech and Hungarian reference indexes.
“My opinion is that there still is growth potential based on the speculative bubble principle,” Nilas says.
The first 2017 figures showed a world economy in a better shape than initially expected and rising financial results, while the European capital market enjoyed more interest from investors, especially now that the electoral risk in France is gone.
However, analysts say the time ultra-low interests is almost over and are worried about how things will go when they finally start rising again.
(English version by Loredana Fratila-Cristescu)