The Lehman Brothers impact on Romania's stock market

The largest local bank listed on BVB, BRD Groupe Societe Generale, registered a staggering 13.25 percent decline in quotation, the most significant since it was listed on the stock market. "I am glad that my heart did not fail," the head of a top brokerage company in Romania said.
"After 5 percent losses in America, it was normal that we would be hit by panic. We are talking about the bankruptcy of one of the top banks. What happened later on BVB and European stock markets was to be expected," the Manager of BRD Securities, Daniel Pocorea, said.

A Reuters analysis quoted by local newswires shows Romania could be one of the most affected emerging markets, following the financial crisis which peaked with the Lehman Brothers bankruptcy and the turmoil of lenders AIG and Merrill Lynch. On Monday, the New York stock market dropped 4.42 percent, the worst decline since the 9/11 attacks.
BVB's decline was almost double, 7.41 percent, with the financial investment companies (SIF) index, BET-FI, down 9 percent. "The impact was expected, as Lehman Brothers bankruptcy stirred panic among investors," the Manager of UniCredit CA IB Securities, Liviu Giugiumica, said.

Beside the stock market, the turmoil had a strong impact on the national currency. The leu depreciated to RON 3,6494 /€1, the highest level in the past three months. "I think a significant impact will be money becoming more expensive, because dollar becomes stronger. Local banks that are refinanced by Western mother-banks could lend money to their Romanian subsidiaries with higher interests. We will further see higher interests for loans and deposits, subsequently," financial analyst Bogdan Baltazar said.