The shares listed on the Bucharest Stock Exchange began the year in full gear with an average growth of nearly 4%. The stars of the first trading day were the SIFs, the top performers last year, which rose by 6.2%.
The Stock Exchange therefore verified the rule that says the first day of trading yields significant profits for investors, for the eighth year in a row. The total value of the listed companies increased by no less than 380 million euros yesterday, reaching 15.7bn euros.
Despite years when growth would be even higher in the first day of trading, this year was the first when one could make the banking interest for a whole year in just the first day.
Stocks like SIF Transilvania or SIF Muntenia yielded over 6.5% yesterday alone, with investors continuing to think of how valuable the stakes the SIFs hold in Banca Comerciala Romana are. The BET-FI index overshot the 50,000-point mark for the first time yesterday, thus reaching a new all time high.
The top performers were banks like Banca Transilvania (5.6% growth) and BRD (3.7%), along with petroleum companies, such as Petromidia, up nearly 5% and Petrom, up over 2%.
The stocks becoming more expensive in January is a rule that applies on the foreign stock exchanges quite often, as well. This phenomenon is known as "the January effect". Among the factors thought to cause this growth: the optimism at the beginning of the year, in addition to higher sales at the end of the previous year, either for fiscal reasons or ordered by the fund managers that are trying to rearrange the portfolio structure to make it look better in the full-year report.
"I think the progress of the shares is mainly due to the investor expectations for growth in January, in line with the rule of the previous years. Nothing happened during the (winter) holiday break to justify such a growth," says Laurentiu Floroiu, trading manager with Capital Securities, the brokerage firm of Greek Eurobank. He added the market would most likely go up over the next few days, though the trend in the first few days of the year did not offer any indication as to where the market is going this year. Furthermore, another reason for growth on the Romanian market could be the change in the taxation method, albeit it means a tax increase or the days off pertaining to the winter holidays, which drew the reference dates for dividends or bonus shares closer.
The strong growth might thus be due to the investors that are buying back the shares they sold at the end of last year to cash in on their profits taxed by 1%. This tax went up to 16% as of this year for the shares held for less than one year.
On the other hand, some investors were tempted to postpone the sale of their stocks at a loss for this year due to the change of the taxation method, which allows losses to be deducted from profits as of 2006. Some of the shares that witnessed a less convincing performance last year, like Impact or Flamingo International ended the day at a loss, because there were more sellers than buyers. vlad.nicolaescu@zf.ro
