Brokers fear foreigners will continue to be net sellers

Brokers said that foreigners were net sellers because of the political crisis, adding that this situation could repeat itself in November. “From what we can see at the moment, foreigners are selling in November too. There is a positive feeling for emerging markets, but in Romania foreigners prefer to sell or wait for clarification of the political situation. Once this uncertainty ends, things will return to normal,” said Valerian Ionescu, Trading Manager at Banca Comercială Română (BCR).

The Bucharest Stock Exchange (BVB) declined in October for the first time after seven months of sharp increases for most companies. Last month, the BET-FI index, which tracks the five financial investment companies (SIF), lost some 16 percent. “The sales by foreigners are related to the political crisis. The Senate’s decision regarding the threshold for SIFs will not change the situation significantly. Even if things are good in specific terms, a 10-15 percent gain can be easily cancelled by an exchange rate depreciation,” added Ionescu.

Senators voted two days ago in favour of the draft law recommending the raise of the cap on maximum SIF stakes to five percent from one percent. However, Chamber of Deputies will have the final say in the matter. The activity of foreigners on the Stock Exchange continued to be low in October, considering they were involved in 16.6 percent of the buys on the Stock Exchange, and nearly 20 percent of the sales. Total sales by non-residents amounted to €23.4 mln, while buys totalled €19.6 mln.

Romanian individual investors dominated the market again, acquiring shares worth €96.4 mln, being net buyers, with €4.15 mln. In yesterday’s session, BVB increased sharply, with the 5 SIFs enjoying growth of some 7 percent, the largest advance in almost five months. Yesterday, SIF Moldova rose 8.5 percent, SIF Transilvania appreciated 7.3 percent, while SIF Oltenia increased 6 percent.