Romania’s capital market fully recovered from Ukraine war shock, but risks remain

By the end of the first half of this year, the Romanian capital market had fully recovered from the decline caused by the war in Ukraine, but the other external risks are still present and can significantly influence the activity in the capital markets, according to a Bucharest Stock Exchange (BVB) comment.

The outbreak of the war in Ukraine at the end of February caused the Romanian capital market to decrease by 3.6% in the second month of the year when looking at the BET-TR index, which also includes dividends.

Four months later, the capital market returned an increase of 0.8%, also for the BET-TR index. By comparison, the total return variants of the S&P500 or STOXX600 indices decreased by 20%, respectively 14.6% at the end of the first six months.

The international indices of total return type such as FTSE Emerging Markets or MSCI Frontier Markets - indices in which Romania is also included - were in negative territory with -14.8%, respectively -20.5%.

“The results for the first six months show us that the investors who trusted Romania had un upside potential. Opportunities and threats are always present in capital markets, which are currently going through a complicated context because there are multiple factors that are difficult to quantify in the short term. The fact that Romania has positioned itself better compared to other indices or other markets is not a guarantee for the future, but it is an image that captures the evolution of the market at a given time, and this image is relevant for investors when deciding where to allocate capital,” said Radu Hanga, president of the Bucharest Stock Exchange.

Romania has become increasingly visible internationally and has been present, since June 20th, with 12 companies in the Russell FTSE index dedicated to emerging markets.

The 12 companies are Banca Transilvania, Nuclearelectrica, OMV Petrom, TeraPlast, One United Properties, MedLife, Transport Trade Services, Purcari Wineries, Conpet, IMPACT Developer & Contractor, Sphera Franchise Group, and Aquila.

(Photo: Dreamstime)