Financial companies crash - Rising selling knocks out the BET-FI index in only 10 minutes

Publish date: 09-10-2008
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Financial companies at the Bucharest Stock Exchange (BSE) known as SIF plummeted 10 percent in just 10 minutes owing to increasing sale orders on reduced liquidity, which triggered general slump on the market.

Liquidity stood at 21.39 million lei.

"Many scared investors tried to sell at any price and as they saw the SIFs scrambling up they started to sell. There simply were lots of sales in only 10 minutes and, with low orders both in selling and in buying, quotations collapsed," declared Nicu Grigoras, broker with Intercapital Invest.

The BET index of the ten best companies on BSE slid 2.87 percent to 3,497.49 and the BET-C composite index measuring all listed shares minus financial companies lost 1.62 percent to 2,618.12.

The BET-FI index of the five financial companies SIF plunged 11.00 percent to 17,162.26 and the ROTX index for trading blue-chips in Vienna fell 1.14 percent to 8,583.77.

The BET-XT index assessing the 25 most liquid companies on BSE decreased 4.92 percent to 345.69 and the BET-NG index reflecting the evolution of the ten power companies slipped 4.05 percent to 485.53.

"We weren't quite expecting such a breakdown, but the market gave us a pretty nasty start, with external bourses stable, even slightly on the rise," added Grigoras.

However, European bourses witnessed significant recovery at midday after consistent losses yesterday helped by the central banks' intervention to cut key interest rates.

The FTSE index in London added 1.38 percent to 4,428.88 and the DAX index in Frankfurt rose 0.09 percent to 5,018.31. The CAC40 index in Paris increased 2.06 percent to 3,568.98.

The second lender by assets and network BRD SocGen (BRD) fell 1.84 percent to 8 lei on deals of 3.44 million lei.

Financial company SIF Moldova (SIF2) cheapened 10.23 percent to 0.79 lei, SIF Oltenia (SIF5) sloped 10.78 percent to 0.91 lei

Oil company Petrom (SNP) slipped 0.40 percent to 0.251 lei.

SIF Banat-Crisana (SIF1) plunged 12.37 percent to 0.815 lei, SIF Transilvania (SIF3) dropped 9.64 percent to 0.45 lei and SIF Muntenia (SIF4) crashed 12.12 percent to 0.58 lei.

Austrian-based lender Erste Bank (EBS) listed at the international tier and the majority owner of Romania's largest bank by assets BCR, stayed at108 lei.

Fertilizer maker Azomures (AZO) slid 14.99 percent to 0.295 lei and gas operator Transgaz Medias (TGN) dropped 10.83 percent to 140 lei.


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