International rating agency decided yesterday to cut Romania’s rating, cutting it below the investment grade. Fitch’s decision comes about two weeks after Standard & Poor’s reported similar review. Although S&P dented the trading session at Bucharest Stock Exchange, the Fitch’s downgrade had no major impact on the market.
Brokers: Romanian equity market will not be affected on short-term
Fitch rating downgraded Romania’s ratings for long-term foreign currency IDR from ‘BBB’ to ‘BB+’ and for long-term local currency IDR from ‘BBB+’ to ‘BBB-‘.
The two-notch downgrade reflects Fitch’s concerns about the macroeconomic policy framework in Romania and its ability to avert a severe economic and financial crisis.
Specialists polled by Wall-Street think the low prices of shares included this type of events, and the second rating cut had no effect in the yesterday’s trading session.
Late October, when S&P announced one-notch downgrade for Romania, indices at the stock exchange closed the trading session on major slumps. Indices of financial investment companies (SIF), BET-FI and the indice of energy companies, BET-NG registered the biggest declines, of over 9.81%, respectively 10.95%.
However, the yesterday’s buying spree of investors was not dented by the analysis report issued by Fitch, the indices closing session on major increases.
Equity market will not be impacted by the second successive downgrade of the country rating, said Andrei Ciubotaru, broker at Vanguard.
“In theory, the capital market should follow the same response as in case of previous downgrades, but investors had a neutral reaction, the growths evolving in the same terms as in previous ones”, said Marcel Murgoci, operation director at EstInvest.
Considering the fact that there are countries in the region with weaker economic indicators than Romania’s, an
