Brokers point their finger at foreign stock exchanges for staggering decline

SIFs (Financial Investment Companies) have lost 46% of their value in less than two months and all stock exchange indexes have plunged since the beginning of the year. Brokers say they were too optimistic when they expected an exit from the crisis and over 20% rises at the beginning of the year.
The Bucharest Stock Exchange's leading BET index has lost over 23% this month, whilst financial companies, whose performance is measured by BET-FI, has fallen by over 36% against the last quote in April. Declines recorded in May were almost as steep as those of September-October 2008, when the bankruptcy of Lehman Brothers investment bank led to a collapse of stock exchanges across the world. Then investment funds had to liquidate their portfolios when investors redeemed their shares.
"This is not just a stock exchange correction, it is a medium-term decline. Investors' outlook has changed. A year ago they were optimistic about exiting the crisis, but the latest events on the foreign markets suggest it will be a while until all problems are resolved. And considering that the stock exchange has up until now anticipated an exit from the crisis, and now we see it has been put off, a trend reversal has occurred on the market," explained Razvan Pasol, general manager of Intercapital Invest brokerage firm.