Global financial crisis prompts the worst year in the history of Romania's core bourse

Publish date: 29-12-2008
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The international financial turmoil sent away the foreign investors on the Bucharest Stock Exchange (BSE) in 2008 and paved the way to indexes’ unprecedented collapse, of up to 84 percent, as large economies face the worst recession in the past 80 years.

The first signs of the economic turmoil appeared last summer, when indexes on BSE posted record highs. In July 2007, the BET index of the ten best companies on the market reached the maximum level of almost 11,000 points and the BET-FI index of the five financial companies or SIF stood around 95,000 points.

A year and a half later, the investors with placements in shares witnessed low portfolios as the country’s core bourse plunged up to 84 percent at the end of the year.

The BET index ended year down only in 1998 and 2008, but this year’s result is by far the worst in its history. The massive drops in 2008 concurred just like in 1998 with foreign investors’ decision to exit the emergent markets as they were considered risky and to head towards safer assets.

In 2008, the BET index plummeted 70.47 percent and the BET-FI index fell 84.05 percent.

Shares in the financial sector dipped significantly in the past year, being the most affected by the economic crisis, both in Bucharest and on other international markets. However, all these shares ended the year in the red on the local market, while on developed markets there were some shares with positive evolutions at the end of the year, said Darie Moldovan, broker for Broker Cluj.

The Rasdaq over-the-counter market decreased 55.25 percent at year-end, despite the fact that it has a lower liquidity compared to the core bourse.


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