Non-resident buyers doubled their stock market investments in 2007

Non-resident investors spent over €226.4 million on the stock market in 2007, 33.8% more year-on-year. Foreign investments on the Bucharest Stock Exchange (BVB) reached €1.66 billion, compared to last year’s €845 mln.

In December, foreign investors sold over €17 mln worth of stock, while local investors acquired an equal €17 mln in stock. Individuals acquired €52.6 mln worth of stock while legal entities spent €84.5 mln and sold €120 mln.

Foreign investors reduced their market holdings since August due to the US credit crisis, which led to drops on major international stock markets.

The money that foreign investors pulled out are not likely to re-enter the market soon. “I think we will see a neutral period. If January will enjoy growth it is possible that foreign investors will return, but this scenario is unlikely,” said Iulian Panait, President of investment advisory company KTD Invest.

The sale by non-residents of stocks reached €1.433 billion in 2007. In the first quarter non-residents sold €385 mln worth of stocks. In November sales by non-residents outgrew acquisitions, at a total of €60 mln, the largest value since the stock market was founded.

Two of the most important names that entered the market in 2007 were investment banks Lehman Brothers and Morgan Stanley, both targeting construction companies.

Lehman Brothers Real Estate Partners, part of the Lehman Brothers group, bought 3.08 percent of Impact Developer&Contractor for €9.6 mln. Morgan Stanley bought a significant portion of real estate developer Imotrust Arad, listed on Rasdaq. Morgan Stanley also took over 22.9 percent of cable producer Romcab Targu-Mures, and its investments amount to €9.3 mln.

The largest BVB investments were made by the American division of Swiss bank Julius Baer, at €400 mln.