Two Romanian companies managed to double investors' money in a challenging year for the local stock market
In a difficult year for the Romanian economy and the local stock market, 20 companies listed on the Bucharest Stock Exchange managed to bring double-digit returns to their investors. Two blue-chip companies defied the crisis and doubled…
Andrei Chirileasa · Journalist
· Updated · 4 min read
In a difficult year for the Romanian economy and the local stock market, 20 companies listed on the Bucharest Stock Exchange managed to bring double-digit returns to their investors. Two blue-chip companies defied the crisis and doubled their investors' money. However, 2020 was a challenging year for investors as 27 companies, including some of the blue chips, recorded negative returns between -10% and -45%.
The BET index, which follows the evolution of 17 blue-chip companies traded on the Bucharest Stock Exchange (BVB), ended 2020 with a 1.7% decline compared to the end of 2019. This figure alone suggests a lost year for investors.
However, the chart shows a different picture. The BET, and the whole market, had a rollercoaster evolution in 2020. It started the year with new highs, passing the 10,000-point mark for the first time after the 2008 crisis, to lose close to 30% of its value in just two months (February-March) after the COVID-19 pandemic became a global issue. Since the end of March, it has slowly recovered, with ups and downs, and is currently at the same level recorded one year ago. This evolution also brought opportunities for investors to record significant gains. From the end-of-March lows, the BET has gained more than 36% to date.
The market volatility also led to higher trading volumes on the Bucharest Stock Exchange. The share turnover reached RON 12.2 bln (EUR 2.53 bln) last year, the highest level since 2014 (in local currency). The average daily turnover thus went up to EUR 10 mln.
The year's biggest winners
Some 20 companies listed on the Bucharest Stock Exchange's main segment recorded total returns of over 10% in 2020. These returns come from the share price evolution and the dividends paid by the respective companies.
In particular, two companies had outstanding evolutions: industrial group Teraplast (TRP) and medical services provider MedLife (M). Both are market leaders in their field, and both are controlled by Romanian entrepreneurs. Simultaneously, both have been very active in recent years and expanded rapidly through a combination of takeovers and new investments.
