The traded volumes dropped to the year’s low in September, 310 million shares, and investors chose to sit and wait because of the uncertainty surrounding the trend of the Chinese economy and Fed’s monetary policy. The main index of the Bucharest Stock Exchange, BET, is 0.46% lower than it was at the end of last year.
On September 17, Fed left the key rate unchanged. Both Fed officials and analysts do not rule out the possibility of a rate increase by yearend.
“The trend will remain tightly connected to the investor expectations about interest rates. As long as there is pressure to raise the rate, reluctance to invest will not go away,’ believes Valerian Ionescu, broker with BCR.
“At least in the short run, until we get more information, I don’t think we’ll see significantly higher volumes.”
The financial results of the listed companies, which are due to be published in November, do not have the potential to move the stock market as much as the announcement that interest rates – now at all-time lows, will be raised, either.
Investors will keep their eyes on the global macroeconomic situation and on foreign news. Bucharest Stock Exchange traded volume might see a very slight increase in the fourth quarter as investors adjust portfolios before the winter holidays. Low volumes will continue to dominate the market, but quotes will vary a lot due to the uncertainty surrounding Romania’s and USA’s monetary policy.
“Volatility will remain the key of the game and will affect the market until the first decision of the Fed. Those who want to take advantage of the volatility must be on the market but that means active portfolio management. A passive approach won’t bring too much of a yield,” Ionescu concluded.
(English version by Loredana Fratila-Cristescu)