The big international investors are rushing to buy assets in the countries that are about to join the European Union. Consequently, all the large stock exchanges in Central and Eastern Europe, Romania included, have been posting significant growth since the beginning of the year, having even reached all-time highs this week.
The Bucharest Stock Exchange has already surged 16% in January, the Warsaw market went up 12%, whereas the Prague stock market is up 11.6%. The Budapest exchange has increased six percent since the beginning of the year, with a similar percentage posted by the Russian stock exchange.
These surges have put to shame the annual yields offered by banking deposits or T-bills in any of the above-mentioned countries.
"The emerging markets have regained their status of attractive investment options in the past two years: the risk is no longer that high, whereas the profit opportunities cannot be ignored. The investment fund managers are again pumping increasingly more capital into these markets, especially in the countries that will join the European Union in the first and second wave. EU integration lends legitimacy to these markets and all the countries joining the Union in the first two waves stand to gain from it. The surges posted by the stock exchanges are merely a natural consequence of this phenomenon," says Sergiu Oprescu, president of the Bucharest Stock Exchange (BSE).
The sustained growth of the CEE markets comes after an entire year (2003) that brought significant gains to investors. The markets in Poland, the Czech Republic, Romania, Russia, and Hungary helped investors gain at least 30% last year.
Although deemed as natural consequence in countries with a lower degree of emergence, such as Romania and Russia, the market surge in the countries set to join the EU in the first wave is slightly out of sync, according to specialists.
"The market rebound in those countries set to join the European Union this year is rather surprising. Normally, the stock prices should already encompass the premium induced by the EU accession. However, the Central and Eastern European markets, even those in the first wave of EU accession, are still credited by investors with significant growth potential," says Adriana Marin, head of the analysis division at BRD Securities-Groupe Societe Generale, one of Romania's main brokerage houses.
The Romanian stock market has seen significant growth in the past two years, as impending EU accession signals have become louder and clearer. Thus, increasingly more foreign investment funds have bought stakes in the large listed companies, such as SNP (National Oil Company) Petrom, BRD (Romanian Development Bank), Banca Transilvania, the Financial Investment Companies (SIFs) and various drugmakers.
laurentiu.ispir@zf.ro
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