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November 30, 2022

ARIR: We are at historical highs and there is interest for the domestic capital market

Without the intervention of central banks, the decline – recovery cycle would have lasted much longer  

The Romanian Investor Relations Association (ARIR) has presented the conclusions of the market specialists regarding the evolution of the capital market, as discussed at “Market Sentiment” event. Graduality and dosage are the terms that best characterized the measures taken by the National Bank of Romania (NBR) lately to maintain a balance in the market. We can see BET index at historical highs and this can be perceived as a signal of a not too distant economic recovery and an increased interest of investors for the domestic capital market.

Cristian Popa, CFA, Member of the Board of Directors, NBR:

“The National Bank of Romania did not cross the line, did not exaggerate with the decrease of the interest rates, there was gradualism, also dosage, both well calibrated. Through the decisions taken, a certain balance has been ensured, which is neither easy to obtain nor to maintain. If we had exaggerated, it would have been seen firstly in the exchange rate, and in a few months, half a year, in inflation. Some people think that the interest is taken out of the hat, that it is made out of pen, nothing could be wrong! There is a very elaborated process, we work even 2 months for a decision, there are 3 departments involved in the process, we take the economic data piece by piece. From the outside it may seem simple: reduce, maintain or increase, but it is not so at all! Our decisions have effects on millions of citizens, we do not play with them, there is no room for errors. ”

Daniela Șerban (photo), ARIR President & Co-founder:

“Capital markets are currently on an upward trend. BET, the main index of the Bucharest Stock Exchange, reached historic highs. Currently, Romanians’ money is mainly in bank deposits, but it is a favourable moment for investments. It is a good time for all of us to be more active, to contribute more and more to pension funds, even for Pillar III. I’ve heard a lot of young people saying they do not have plans for their pension funds, but unfortunately it is a wrong perspective and a proof that we need to put more emphasis on financial education.”

Dragoș Manolescu, CFA, Deputy General Manager, OTP Asset Management:

“In recent years, the Bucharest Stock Exchange has brought very high dividends and, if we refer to global markets, BVB indices have been at the forefront. It is the cheapest stock exchange in the emerging markets area and we have the most attractive dividend even in these conditions. Globally, we have been witnessing since September 2020 a rotation that started from technology companies to value, “cyclical” companies, which have regained investors’ confidence. Last year, we witnessed the largest outflows from bond funds globally. In mutual funds, the redemption request comes when the client has the impression that the market is heading in an unfavorable direction. Without the intervention of the central banks, we would have witnessed a liquidity crisis, a decline – recovery cycle would probably have lasted much longer.”

Andreea Pipernea, CEO NN Pensii:

“We look at things from the perspective of the long-term and very long-term investor who builds portfolios for the next decades. Pension funds act as a stabilizing factor at market level because, as can be seen from our reports, they are generally stable. BET is at an all-time high, it is an important moment, but we are also looking at other market parameters – liquidity, depth and how vast is the local market. BET is currently confirming an economic recovery in the next period.”

Aurel Bernat, CEO BT Asset Management:

“It is very important that we are at maximum again and there is enthusiasm among both individual and institutional investors. Although we talk more and more about financial education, unfortunately last year we had strong moments of decline in the stock market and individual investors were missing. Now, reaching highs and media around the topic being strong, there is a higher interest compared with last year. It is important that short-term investors do not judge the performance of the last 360 days which has been spectacular, but think long-term regardless of the investments they want to make.”




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