The net acquisitions of foreign investors on the Bucharest Stock Exchange reached a record high in February, a figure standing at more than 90 million euros, close to the figure invested in Romanian shares throughout the entire of last year.
Despite record investments, the market plunged rapidly at the end of February.
The previous record had been set in the first month of last year, when net acquisitions by non-residents had reached 58.3 million euros. The amount at the time had been largely influenced by the money the Czechs at Zentiva paid to take over pharmaceuticals maker Sicomed Bucharest.
Brokers, however, say that investments made by the foreign investment funds last month can hardly be considered spectacular. The record high reached was not due to larger acquisitions by foreigners, but to the fact that they sold less than they did in the previous months. Foreign investors sold 73.7 million euros worth of shares on the Stock Exchange in February, about 20% less than in January. On the other hand, they bought 164.02 million euros worth, 12.4% less than in January. Overall, the net acquisitions last month were 68.5% higher than in January.
The amounts of money invested by foreigners on the Bucharest Stock Exchange over the last few years have generally followed the same trend, with the most important volumes, in terms of net acquisitions, recorded in the first month of the year followed by the second half of the year. However, developments on the market at the beginning of 2007 no longer resembled those in 2005 and 2006, with the Stock Exchange witnessing decline rather than growth.
"The 90 million euros is hardly that big an amount. Maybe for Romania, which has a small market, we could say that it is a large amount to a certain extent, but I couldn't say it is something that supports the idea that Romania is on the radar of major investors," feels Cornel Fumea, head of BRD Securities, one of the brokerage firms that trades for foreign investors.
He adds that this time it was February that came with a higher volume of net acquisitions than January, as had happened in the previous years.
"Investor expectations matter. Some were probably expecting prices to witness a steady rise in the first month of the year and, as it did not happen, they had to wait to cash in on their positions, which could explain the lower sales," Cornel Fumea states.
He also says that new investment funds have entered the market since the start of the year, though they did not enter in such a manner that one could say the change was substantial and brought about by accession to the EU.
"I expect more investors to enter in the second half of the year. To begin with, investors are waiting for better conditions in terms of prices," Fumea believes.
The trend of the market over the last few years has shown that a rebound of shares often overlaps with an increase in acquisitions made by foreign investors.
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