Market commentary by eToro analyst for Romania, Bogdan Maioreanu
Romanian investors increasingly fear inflation and the state of the domestic economy, according to the latest eToro Retail Investor Beat* survey, which analyzed individual investor preferences.
Taking into consideration the political instability and the pandemic crisis, it is not surprising that a whopping 70% of the surveyed Romanian investors are not feeling confident about the Romanian economy, an increase of 12% compared to three months ago. Moreover, less investors are ready to increase their investments. Still, Romanian investors are showing a high interest in crypto assets, which can be seen as a hedge to inflation.
Romanian investors remain interested in local stocks but are also trading in foreign equities like the ones in the S&P 500 and DJIA (Dow Jones Industrial Average), which include many companies that are operating worldwide, offering brand familiarity. 29% of investors said they are owning foreign stocks, slightly below the figure of those who said they are owning domestic stocks (35%).
While interested in stocks, according to Google trends, Romanian investors are even more interested in crypto. The eToro Retail Investor Beat survey, which was carried out in the third quarter in 12 countries, showed that 51% of the surveyed Romanian investors own such assets. This is an increase of 5% over the 46% investors in the last quarter’s survey. It is more than double the survey average of 24%. With 51% of investors owning cryptoassets, Romania ranks first when it comes to how many investors have crypto in their investments, followed by Poland with 37% and Czech Republic with 31% of investors owning some form of crypto asset.
Going back to the S&P 500, the Romanian investors’ sentiment is mostly positive, with 31% considering that in the next 12 months the index will rally with gains between 6 to 15% while 3% of the investors are very optimistic that it will surge above 15%. On the opposite side, only 14% of surveyed Romanians believe that S&P500 will suffer a correction up to 15% and 5% are highly pessimistic believing that the index will crash with more than 15%.
Despite being mostly optimistic about future prospects of the markets, Romanian investors are planning to decrease their investments in domestic shares from 35% to 31%, in foreign stocks from 29% to 27% but increase commodities holdings from 15% now to 21% in the next 12 months. A few (2%) plan to decrease their investments in crypto.
As for the amounts to be invested, 28% of the questioned Romanian investors declared that they will invest more in the next 12 months while 33% will invest less with 38% investing about the same amount as before. One of the reasons might be that most investors – 58% – fear a correction of the domestic market, in the next year.
The eToro Retail Investor Beat survey asked 6000 retail investors, from 12 countries, including Romania, about their investment habits and sentiment about the markets. The survey is relevant for Romania since retail investors were defined as self-directed or advised, had to hold at least one investment product and did not need to be eToro users.
*Survey research conducted by Opinium from September 17th – 30th 2021. In total, 6,000 retail investors sampled across 12 countries – 500 in each: UK, US, Germany, France, Italy, Spain, Netherlands, Denmark, Australia, Poland, Romania and the Czech Republic. Retail investors were defined as self-directed or advised and had to hold at least one investment product including shares, bonds, funds, investment ISAs or equivalent. They did not need to be eToro users
**Bogdan Maioreanu, eToro analyst and markets commentator, has over 20 years of experience in financial services and investments and a strong background in journalism. He held different Corporate Banking management positions in both Raiffeisen Bank and OTP Bank, before moving to business consultancy roles working for IBM Romania among others. Bogdan is an Executive MBA from Asebuss and Washington University.
***eToro is a multi-asset investment platform that empowers people to grow their knowledge and wealth as part of a global community of successful investors. eToro was founded in 2007 with the vision of opening up the global markets so that everyone can trade and invest in a simple and transparent way. Today, eToro is a global community of more than 23 million registered users who share their investment strategies; and anyone can follow the approaches of those who have been the most successful. Due to the simplicity of the platform users can easily buy, hold and sell assets, monitor their portfolio in real time, and transact whenever they want.