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 of Dutch investment fund Middle Europe Investments Fund told ZIARUL FINANCIAR.
The Dutch at MEI are now managing about 35 million euros in assets, three quarters of which are invested in Romanian shares. The Stock Exchange has been on the rise since July but most of the growth occurred during the middle of September, when the upward trend became even more visible.
The ZF Index calculated by ZIARUL FINANCIAR, which includes the most important companies on the market along with the SIFs, has risen by 55% compared with the low at the end of June, with the growth in the past month standing at 22%. SIFs have had the biggest contribution to the increase of the market. Their index, BET-FI, has gone up by 80% over the last four months.
Foreign investors on the Bucharest Stock Exchange have bought 665 million euros' worth of shares and sold 555 million euros' worth since the beginning of the year; foreign investments therefore amount to 110 million euros for the first ten months. Net foreign investments amounted to 128 million euros for the entire last year.
SIFs rose another 1% yesterday, due to sizable fluctuations, while the BET index, based on the main companies listed ended the day with a 0.7% adjustment.
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