The flurry caused by the sharp downturn of American economy after lawmakers rejected Paulson’s massive bailout plan, has geared major plummets in indices at Bucharest stock markets, in the context of a mounting liquidity and national currency lost ground against euro.
A correlation of BSE with international markets, a weaker leu, a melting Romanian economic activity and lending against US and EU recession will be, according to specialists interviewed by Wall-Street, effects of the highest boiling point that world’s financial crisis ever reached.
“Meltdowns at Bucharest Stock Exchange were triggered by losses at international markets. However, during yesterday’s session, shares have mildly recovered” said Gabriel Necula, Operation Manager with Prime Transactions.
BET index slid 3.88%, down to 4,258.04 points, while BET-C indice dropped 2.74% down to 3,235.74 units. BET-FI index lost 5.56% and Vienna trading’s ROTX index. BET-XT index dropped 4.41% and BET-NG lost 3.93%.
“It is hard to imagine steep declines in the upcoming period as well, nevertheless, it is certainly not impossible. It is a strong correlation and this is what yesterday’s trading session emphasized. There are still buyers in times of major declines, but when the market is undergoing an edgy trend, they are no longer out there,” Necula pointed out.
Mihai Chisu, broker at IFB Invest, says international markets stabilization will lead to BSE recovery. “Anyway, foreigners will then start pumping loads of liquidity, but only if the market has something to offer in return. If there will not be any instruments to draw their interests, issuers, and a more mature share market, then we will have to suffer,” Chisu explained.
For now, the influence at micro extent (companies and banks) is low. “I believe these events will dent our economic environment sooner or later. Thus,
