Foreign investment funds were again bought onto the Bucharest Stock Exchange in October, after seven months of lying in wait. The return of the foreigners on the market coincided with the release of the European Commission report on Romania, published on September 26, which confirmed January 1, 2007 as the date for Romania's accession to the European Union.
Net foreign investments reached 36.6 million euros last month, with October being the second best month in terms of the volume of foreign investment this year after January, when foreign funds bought almost 60 million euros more than they sold, causing quotes on the BSE to soar.
The difference between purchases and sales of shares by foreign investment funds had been almost zero from March through September.
Brokers and some of the investment fund managers operating on the market expect the amount of foreign capital on the market to increase a great deal next year and are probably trying to anticipate this. The wave of foreign investments on the Stock Exchange projected for next year is not due to expectations of a higher economic growth after EU accession, but to the fact that the charters of many investment funds allow them to invest in the European Union, which will include Romania as of January 1.
"Ever since our establishment in March, we've kept buying and I could not say we bought more last month. There are, however, some factors that have attracted foreign investors since last month. Predominantly these factors concern the confirmation of accession, which brought the Romanian market back to the attention of the funds, the trends of the stock markets in the region after the declines in May and June and the restored feeling of security among institutional investors on the emerging markets, influenced by Fed slowing down the interest raise pace," Cristian Fader, the manager for Romania