U.S. financial crisis causes €4.5 bln in losses on BVB

Losses registered by shares with the highest level of liquidity, including those of financial investment companies (SIFs), amounted to €1.7 bln and represent one third of the market value lost by companies listed on BVB.

The Romanian equity market was affected by foreign investment funds, which withdrew money to protect their business after losing significant amounts of money on the U.S. stock exchange.

“The influence of the U.S. market was felt because of foreign institutional investors. When the market started to fall, they decided on keeping their current shares, which led to a drop in liquidity and quotations,” the General Manager of the BT Securities brokerage company, Rares Nilas, told Business Standard. Companies with a high level of liquidity were most affected, as they have a large number of shares on the market. Thus, the market value of Petrom, Romania’s largest oil and gas company, slumped by €753 million, a 7.75 percent drop.

On the other side, among companies which lost in terms of percentage, not of value, is the Carbochim abrasive products manufacturer, whose shares plunged by 30.7 percent, or €7.8 mln. Brokers see a possible come-back of the market, when the U.S. stock exchange will level off.

“When U.S. and European stock exchanges will reach new record highs, the Bucharest Stock Exchange will register an upward trend. That will be the boost it needs,” The General Manager of the Finans Securities brokerage company, Adrian Simionescu, told Business Standard.

The U.S. liquidity crisis was triggered this summer when major U.S. mortgage lenders started to register massive losses on collecting real estate receivables.

As a consequence, international banks were unable to finance banking instruments on the mortgage market, thus pressuring central banks to inject more money in the international financial system.