Romanian blue-chip index drops almost 5 percent in 2018, ending six-year consecutive growth

The Bucharest Stock Exchange (BVB) closed 2018 with a 4.77 percent decrease of the local market's blue-chip index, the BET, which includes the most traded 15 companies, BVB said in a release.

"The Romanian stock market closed 2018 in the negative after the BET index dropped 4.77 percent, thus ending six years of straight growth. The BET-TR, which includes the dividends paid by BET companies, succeeded however to stay positive, with a plus of 4.3 percent, which - given the market conditions at the end of 2018 - can be considered a notable performance," said Lucian Anghel, president of the BVB Board of Directors.

According to the document, the strong downward trend was triggered on December 19, 2018, when information emerged about the planned additional taxation of the banking, energy and telecommunications sectors and about changes to pensions Pillar II, when the BET index fell 11.21 percent, wiping out in one day the entire year-to-date growth of the local capital market.

According to the release, the Romanian blue-chip index fell 12 percent from December 18 (the day before this news emerged) and the last trading session of 2018, on December 31.

Only the two total return indices, that also include dividends, stayed in the positive territory at the end of 2018, with the BET-TR index recording the most substantial advance.

"Investors need legislative predictability to correctly assess the opportunities offered by the capital market, the environment where Romanian companies accounting for about 10 percent of the country's GDP, operate. That's exactly why investors pay special attention to the actions of the political decision makers that influence the economic environment and the evolution of listed companies," said BVB CEO Adrian Tanase.

The daily average value of stock transactions rose 5.4 percent in 2018 expressed in lei, and was in excess of 45 million lei (around 10 million euro) over the entire year; the total value of trading in all the types of financial instruments advanced by 1.8 percent to almost 14 billion lei (about 3 billion euro).

The stock market capitalization of the Romanian companies was 18 billion euro at the end of 2018, while the capitalization of all companies listed on the regulated BVB market was 30 billion euro in the last trading session of 2018. AGERPRES (RO - author: George Banciulea, editor: Andreea Marinescu; EN - author: Simona Klodnischi, editor: Simona Iacob)