The volatility that engulfed the international capital markets at the beginning of the year continued to make its presence felt throughout the first semester, at the end of which most stock indices were in negative territory. The anxiety of international investors was accentuated in February and reached new heights following the outbreak of the armed conflict between Russia and Ukraine. At the end of February, the Romanian capital market went down by 3.61% in the case of BET and BET-TR, an index that also includes dividends. This decline was in line with the evolution of the indices in the developed markets: -3.14% for US’s S&P500 and -3.36% for Europe’s STOXX600 indices. Subsequently, until the end of the first half, the Romanian capital market decoupled from this downward trend. At the end of June, the Romanian capital market returned an increase of 0.8%, through the lens of the BET-TR index, and thus fully recovered the decreases caused by the war in Ukraine. By comparison, the total return variants of the S&P500 or STOXX600 indices decreased by 20%, respectively 14.6% at the end of the first 6 months. The international indices of total return type such as FTSE Emerging Markets or MSCI Frontier Markets – indices in which Romania is also included – were in negative territory with -14.8%, respectively -20.5%.

”Romania has proven to be a pole of stability in the region. Capital follows the opportunities where they appear and the capital market in Romania has demonstrated its attractiveness among local and international investors. This fact is strengthened by the continuation of the upward trend of the listings of Romanian companies on the stock exchange and by the extension of Romania’s representation on the radar of international investors. The results for the first 6 months show us that the investors who trusted Romania had an upside potential,” said Radu Hanga, President of the Bucharest Stock Exchange.

”The first half of the year was intense for the international capital markets, not only for Romania. Strong episodes of volatility contrasted with sessions where the investment activity was reduced. We could also observe these phenomena on the Bucharest Stock Exchange, but we found that the Romanian capital market reacted maturely, and investors identified here opportunities to preserve or increase capital, which made Romania an attractive investment destination”, said Adrian Tănase, CEO of the Bucharest Stock Exchange.

Other external risks related to the evolution of the coronavirus pandemic, rising inflation, rising interest rates, rising energy prices, supply chain dysfunctions as well as fears of a possible recession in developed markets are still factors that can significantly influence the activity in capital markets. In such a context, the capitalization of Romanian companies remained at the level recorded at the end of last year: RON 141 billion or EUR 28.5 billion.

Florin Cepraga, Senior PR Specialist, Bucharest Stock Exchange

Share

Share