BUSINESS - December 11th 2004
The index of shares on the Bucharest Stock Exchange reach new highs after foreign investment funds started to trade more vigorously in view of the prospective liberalization of the capital accounts next spring.
By ADRIAN N. IONESCU
Stere Farmache, head of the Bucharest Stock Exchange |
BET-C (the aggregate index of all shares except the state investment funds) and BET-FI 9 the aggregate index of the five state investment funds) were also on the rise.
The most sought for were the shares of Petrom, which traded at 3,160 lei per share when at their highest, which is a rise with 110% more since the beginning of the year.
For its part, Rompetrol Refinery Constanta (which owns the Petromidia oil refinery) traded for 944 lei per share at the highest, on Thursday, which is close to the nominal value of 1,000 lei.
The shares of Banca Transilvania and of the Romanian Bank for Development also traded at new highs, as did shares at the state investment funds.
The new found attraction in the Romanian market also made champions of some of the brokerage companies. SWISS Capital took back its first place on the market, with a total volume of the transactions made in November at 723.8 billion lei. It is noteworthy that 45.6% of all transactions conducted this year by SWISS Capital took place this November.
This also goes to prove that _hot money_ enter the market. This type of funding seeks short term investments, which trigger the local currency appreciation. But these funds leave the market as quick as they entered it, triggering serious currency unbalances.
Romanian authorities think this trend will only go even more serious, once the capital account investments will be liberalized, in April 2005, and foreign investors will be able to deposit their money in Romanian banks and Government Bonds. The aggregate value of the Bucharest Stock Exchange and of RASDAQ went over 6,536 billion lei in November.
Translation: ANCA PADURARU