According to the latest report on the performance of the Bucharest Stock Exchange, several new records were made in January 2024. Firstly, the total market capitalization peaked at RON 321bn (EUR 64.5bn). Secondly, the total value of trades amounted to RON 1.7bn during January, growing by 152% YoY. This can also be seen in the main BET index, which grew for the 3rd consecutive month in a row, reaching a new all-time high.
The latest monthly report on the performance of the Bucharest Stock Exchange has been released recently, for the month of January 2024. In the report, we can see that several records were set on the Exchange during the month, continuing solid performance from 2023. For example, during January, the total market capitalization peaked at RON 321bn (EUR 64.5bn), with the total value of all trades amounting to RON 1.7bn, growing by 152% YoY.
Furthermore, the total equity turnover (including ETFs) amounted to EUR 312.9m, growing by 162% YoY, but declining by 29% MoM. This would also mean that the average daily turnover amounted to EUR 15.6m during the month. Moving on to the performance of the Romanian blue chips, in January 2024, out of the 20 companies observed, 17 recorded positive returns.
Performance of Romanian blue chips in January 2024 (%, MoM)
Source: Bloomberg, InterCapital Research
Of them, Aquila and TeraPlast recorded double-digit growth during the month, at 12.5% and 12%, respectively. Following them are Transport Trade Services at 8%, Purcari at 7.7%, and Digi at 3.9%. On the other hand, Hidroelectrica recorded a decrease of 2.5%, BRD of 2.2%, and Electrica of 0.7%. The majority of the remaining companies remained in between the 0 to 3% range during January.
This also meant that the BET index increased overall, by 0.9% MoM, reaching 15,729.39 points, marking yet another all-time high value.
The positive developments by the Romanian capital market also continue to attract new investors, as the number of investors reached 179k by the end of 2023, increasing by 46k or 34% YoY. The Hidroelectrica IPO has a special effect on this, as the large increase in the number of investors came during Q2 at 18k, during the discount period in the H20 IPO. In Q1 and Q3 the numbers grew by app. 8.5k investors each, respectively, while the number in Q4 increased by over 10k.
Of course, besides equity investments, the Bucharest Stock Exchange continues to attract investors due to the Fidelis government securities (similar to retail bonds in Croatia, and the recently launched bonds for citizens in Slovenia), which show that there is definitely an interest in these types of investments, especially when the conditions (interest rates offered), are good. This is also one of the advantages of the Romanian Government bonds issued in the local currency, leu. The reason being is that the exchange rate for this currency with the euro has been stable at 5 lei/euro, and the Romanian Central Bank is actively keeping it within a certain range around this mark. As such, higher interest rates can be achieved on a bond that basically has little to no exchange rate risk, as the interest rates are significantly higher on bonds issued in leu than the ones in the euro. Of course, this is due to the fact that the interest rates on Central Bank deposits are also higher in Romania, standing at 7% currently, as opposed to the 4-4.75% range in the Eurozone.
