All-time highs and record transaction values. It's a description that sums up the first half of 2004 at the Bucharest Stock Exchange. For instance, the BET Index soared to a new record-high on Wednesday.
The forecast rate reductions; economic growth; upcoming European Union integration; changes in the authorities' attitude towards the capital market; and legislative changes were, according to brokers, the main factors that led to surging stock prices this year.
In the past few months, the capital market has managed to turn into one of the main investment options, with many brokers saying they are seeing increasing numbers of investors.
"Within the consolidation process, the stock exchange has mainly focussed on promotion and visibility, a factor that has probably contributed to the increased value of transactions," says Stere Farmache, general manager of the Bucharest Stock Exchange.
In the first six months of the year, the value of stocks transferred on the market exceeded 255 million euros, almost as much as last year, while investors' gains doubled.
Last year's average growth, calculated by the BET-C index, was 26%, whereas the index went up 46% in the first half of 2004. The SIFs (Financial Investment Companies), Petromidia refinery and the Carpatica bank posted even bigger growth, so that the ZF Index, which is calculated by Ziarul Financiar and gauges the evolution of the capital market's most liquid stocks, surged 70%.
According to Stere Farmache, high-value transactions have enabled the Bourse to cut trading fees by 30%, since revenues derived from the cashed fees have exceeded all expectations.
Brokers are optimistic about the market's future evolution. "The first half evolution has exceeded all forecasts and I expect the market to keep growing. I believe the growth was also prompted by the companies' financial results and, in the case of SIFs, by the fact that the investors pinned their hopes on the consolidated capital market law. It looks like the authorities are paying more attention to the capital market, which has helped create a favourable image of the market. Decreasing rates also helped," says Grigore Chis, head of operations at Cluj-based SSIF Broker.
vlad.nicolaescu@zf.ro
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