The Bucharest Stock Exchange (BVB) opened Wednesday’s session down on all indices, with turnover at 27.157 million lei (5.456 million euros) 35 minutes after the start of trading.
The main BET index, which shows the evolution of the 20 most liquid companies, recorded a depreciation of 2.84%, and the BET-Plus index, which shows the evolution of the 43 most liquid shares on the BVB, recorded a decrease of 2.82%.
At the same time, the extended blue-chip index BET-XT, of the 25 most liquid titles, lost 2.52%, while the benchmark for investment fund performance, BET-BK, depreciated by 2.53%.
The BET-FI index of SIFs recorded a depreciation of 0.33%, and BET-NG, the index of 10 companies in the energy and utilities sector, recorded a decline of 2.59%.
The BET AeRO index, which includes 20 representative companies on the AeRO market, was down by 3.17%.
According to BVB data, the biggest increases in share values were recorded by Mecanică Fină (+8.57%), Sinteza (+5.31%) and Lion Capital (+4.15%). On the other hand, the shares of Societăția de Construcții Napoca (-11.03%), Turism Felix (-9.47%) and Simtel Team (-9.04%) were decreasing.
8.2 million Romanians lost 250 lei each in just one week due to political instability
The stock market is in a continuous decline, after the first round of the presidential elections. It is not only investors who are affected. The money from the Second Pillar of pensions, to which 8.2 million employees contribute, is invested on the stock market. Due to political instability, 2 billion lei of this money was lost in a single week. This means that each taxpayer has 250 lei less in their account.
Radu Crăciun, president of the Privately Administered Pensions Association, told Digi24 that private pension funds do not only invest on the stock market. Approximately 60% of investments are in government bonds.
“But what perhaps not many people understand is that the prices of government bonds also vary from one day to the next, so that when, let’s say, Romania’s risk profile increases, then investors, some of them, decide to sell Romanian government bonds, which leads to a decrease in their price,” he explained.
“The evolution of private pension funds is influenced both by the negative evolution of government bonds, by the fact that Romania is perceived as a riskier country, but, indeed, also by the evolution of share prices. We are affected from both places where we have our money invested. At the moment, given the political risk existing in Romania, the financial markets react negatively to these developments,” said the economist.
“We have to understand one thing, after all. Leading a country is more than a dialogue based on beautiful ideas. It’s about numbers, it’s about economic projects, it’s about fiscal policies, and so on. It’s about numbers. Now, if in the political discourse we no longer see numbers and only see emotions, this creates additional nervousness among investors, among the business environment, which, here, is reflected in the evolution of the financial markets,” explained Crăciun.
He said that there have been periods of decline, but that the market has recovered each time. “Money was not lost, but simply the value of assets decreased, which creates the premises for a recovery, provided that there is a stable political climate in Romania and that provides predictability in terms of economic policies and even the geopolitics of Romania. The political scene is key at this moment,” Crăciun also said.