The Bucharest Stock Exchange took a nosedive yesterday, as a ruling on the arrest request for businessman Dinu Patriciu is now expected on February 24, instead of March 3.
The shares of Rompetrol Rafinare (Petromidia Refinery) lost 9.5% yesterday, going below the 0.1 RON/share level for the first time in the last six months. Initially, Rompetrol Rafinare stock was even traded very close to the minus 15% limit allowed for a trading session. The other blue chips lost 2-3 percent yesterday. Banca Transilvania and Broker were the only big-name stocks that actually posted increases.
Petromidia''s market value yesterday was cut by more than 58 million euros, with the company losing over 347 million euros of its total market capitalisation.
This tumble was triggered, according to brokers, by the court''s decision to rule earlier on the arrest request for Rompetrol chairman Dinu Patriciu. On Monday, the Bucharest Court of Law had approved the behest of the prosecutors to rule on the preventive arrest request for Dinu Patriciu on Friday, February 24, according to sources quoted by Mediafax.
"The information according to which the prosecutors succeeded in having the arrest request evaluation moved earlier sent the price of Petromidia shares tumbling down. Then, the decline of this stock triggered a drop in the price of other stocks, as well," says Laurentiu Floroiu, trading manager with Capital Securities, Eurobank''s brokerage company.
"Although Patriciu''s problems are not related to the other stocks, Rompetrol Rafinare is one of the market''s biggest stocks and some investors wanted to take advantage of this drop in order to try and drive the price of other shares down as well," Floroiu added.
According to brokers, investors also tried to push down the price of SIFs (Financial Investment Companies). "An attempt of this nature was clearly aimed at SIFs. Certain investors tried to push the shares down by 0.1-0.2, even 0.3 RON/share, in order to buy them back and enjoy the dividends as well. Today (yesterday i.e.), at some point we had no Buy orders for some SIFs, but, after the price dropped 3%, the buyers emerged," the quoted sources say.
The BET-FI index dropped to 48,900 points yesterday. Two weeks ago, the same BET-FI index had gone up to 55,000 points, 12-13 percent higher than yesterday''s minimum.
Yesterday''s events reminded investors of a period last February, when the end of the month brought a declining trend that annihilated most of the market''s growth. Last year, the decline started on February 24, with a 1% drop, whereas February 25 brought a 3% drop.
"Last year, when our market was going down, a general decline was being felt on neighbouring markets. Now it is only happening on our Stock Exchange, as the other markets are growing. The market will fall only if the other markets are falling, too. A fall is triggered by institutional investors and that is why we must closely monitor the other stock exchanges. We must also watch the Patriciu case very closely, as a potential arrest may determine a new market drop," Floroiu says.
