Most stock indices in international capital markets went into the red in September 2022, marking a double-digit decline at the end of the first 9 months of this year. The deterioration in investment sentiment intensified after the summer months as investors’ fears about rising interest rates and the possibility of a recession in developed markets grew. These elements already overlap a long line of concerns about the uncertainties generated by the instability in the international climate. Persistent inflation, energy and utility high costs, supply chain risks, and a complicated regional context are elements that capital markets investors have had to navigate so far this year.
At the end of the first nine months of 2022, most stock indices were in correction territory. For example, several total return indices, which also include dividends, posted declines of more than 10% between January and September. Thus, the American S&P500 index registered a depreciation of 11.7%, while in Europe, the most representative 600 companies recorded a decline of 18.2% through the lens of the STOXX600 index. A series of international indices in which Romania is included also ended the first 9 months in negative territory: -11.6% for FTSE Emerging Markets and -13.6% for MSCI Frontier Markets. The capital market in Romania aligned with the international trend, even if the BET-TR index had a more moderate depreciation, of 10.5% after the first 9 months of the year. In Romania, a better comparative evolution in relation to other international indices was possible after the BET-TR index reached a new all-time high in August 2022.
“The investors raised an important alarm signal in September in most international capital markets, not only in Romania. The return of volatility in the markets after a calmer level of trading in the summer months brings with it new trading opportunities. Romania was more resilient than other developed capital markets in this complicated international context. We are witnessing a wave of negative data that has led to a deterioration in investment sentiment, especially after it became clear that central banks will raise interest rates, leading some investors to expect an economic slowdown”, said Radu Hanga, President of the Bucharest Stock Exchange.
“The energy and financial sectors hold an important weight in the capital market in Romania, and it is precisely this structure specific to our market that mitigated the negative investment sentiment manifested at the level of other international indices. We expect volatility to manifest itself in the capital market in the last quarter of the year, but the level of amplitude cannot be estimated. That is precisely why, for individual investors, the best strategy is to set a longer investment horizon, and for companies, it is an opportunity to take advantage of the mechanisms made available by the capital market”, said Adrian Tanase, CEO of the Bucharest Stock Exchange.
The investment activity intensified in September on the Bucharest-based stock exchange, following a moderate pace in the summer months. For example, last month, over 140,000 transactions were carried out on the BVB’s Regulated Market, 48% more than in August, while almost 17,000 transactions were performed on the Multilateral Trading System, 13% more than in August. The number of transactions reported in September on the main segment was the second-highest monthly level so far this year, surpassed only by the level from March, when almost 200,000 transactions were recorded.
On the Regulated Market, the trading volume was 13% above August levels in the equity segment, 32% higher in the fixed income segment, 55% higher in the mutual fund segment, while it doubled for the structured products, +102%. At the level of all types of financial instruments traded on the BVB’s Regulated Market, the total trading value in the first 9 months reached RON 17.3 billion, the equivalent of EUR 3.5 billion, up 34% compared to the same period of the year last. The average daily trading value for all traded financial instruments was RON 91.5 million, up 34.8% compared to the January-September 2021.
The most traded companies listed on the Bucharest Stock Exchange, in September, OMV Petrom with RON 168 million, Banca Transilvania with RON 166 million, Evergent Investment RON with 82.3 million, Fondul Proprietatea with RON 54.4 million and BRD – Groupe Societe Generale with RON 49.1 million. At the level of the first 9 months, the leaderboard top positions are held by OMV Petrom with RON 2.12 billion, Fondul Proprietatea with RON 1.68 billion, Banca Transilvania with RON 1.63 billion, BRD – Groupe Societe Generale with RON 723 million, and Romgaz with RON 467 million.