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ERSTE-BCR: 10-15 pc, Bucharest stock market growth potential in 2011

The Stock Exchange could grow by 10 to 15 percent this year, say ERSTE-BCR analysts, the potential being calculated based on the estimates on Government credit, RON/EUR exchange rate and yield of specific euro Government binds, and most of the information indicating the end of recession being included beforehand.

"We have three independent variables: the Government credit expressed in RON, which measures the intensity or dynamics of economic activity, the exchange rate which also captures foreign investors' interest in Romanian assets and their perception of risks associated with investing in Romania and the yield of Government bonds which expresses perception of the country risk", the Head of the BCR Department for Stock Market Research, Mihai Iulian CARUNTU, said on the 15th of May, quoted by Mediafax.

In nominal terms, the balance of the Government credit expressed in RON in March dropped by 1.3 percent compared to February, down to RON 203.95 billion, primarily because of the appreciation of the national currency against the EUR by 2.4 percent. The general stock market index BET covering the ten most liquid stocks went up by 8.5 percent. CARUNTU says the state can support the development of the stock exchange by listing companies in its portfolio, but adds that only such steps are not going to be enough for a well-developed stock market. According to BCR Chief-Economist Lucian ANGHEL, the economy will perform better in the second half of the year than in the first three months, based on data reflecting Q1 economic growth and anticipated investment growth. "While before the publication of official economic growth data, our 2 percent forecast could have been regarded as optimistic, now I think we could duly call it neutral", he said.

Published on 16.05.2011

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