The BRD and Banca Transilvania (TLV), the two biggest banks listed on the Bucharest Stock Exchange, confirmed their "star" status in the first half of this year, bringing investors returns above the level of ones of the BET index.
According to the data provided by the National Securities Commission (CNVM), bank shares are among the most sought after by foreign investors, with net purchases conducted by non-residents amounting to 86m euros in the first five months of this year alone.
Since the beginning of 2007, BRD shares have posted a 47% increase, while TLV shares have generated a 26% gain (taking into consideration the capital increase operated by the bank); in comparison, the BET index climbed by a mere 21%. Both BRD and TLV are listed on the BET index, which gauges the performance of the 10 most important companies listed on the Stock Exchange, excluding SIFs. Banca Carpatica (BCC), the third bank on the BSE only generated a 18% gain, below the market average.
Although the yields generated by the two banks did not match the spectacular 100% levels witnessed by stocks on the RASDAQ, and by some smaller companies on the Stock Exchange, the levels were quite high in comparison with those registered by banks listed on neighbouring stock markets.
Additionally, risks related to investments in BRD or TLV stock are much lower than in the stock of companies listed on the RASDAQ, owing to higher liquidity.
The increase in banking shares was supported by the positive results reported by banks last year and also by the solid outlook of Romanian banks in the wake of EU accession.
In the first six months of this year, shares of BRD-SocGen witnessed a moderately strong increase. While in early January, the bank saw its share price increase by 7.03%, to 19.80 RON/share, by late June the price had reached 28 RON/share.
Because of these increases, BRD's capitalisation topped 6bn euros.
The price of TLV shares dropped by 26.6% in the first six months of the year, from 1.07 RON/share at the beginning of the year to 0.845 RON/share at the end of June, but the decrease was generated by a capital increase operated by the bank throughout this period.
Those who bought TLV stock at the end of last year and also participated in the share capital increase gained around 26%. Banca Transilvania has reached capitalisation of 1.77 billion euros.
During the April 25 general meeting of shareholders, the bank's shareholders approved a share capital increase of 217.7 million RON (around 70 million euros).
The shares Banca Comerciala Carpatica Sibiu (BCC) lost around 5.45% in the first six months of this year, dropping from a price of 0.58 RON/share in early January to 0.55 RON/share during the last session of June.
However, the decrease in this case is also due to a capital increase by bonus shares, which the bank operated in the first half of 2007.
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