Foreign Investments on Romanian Stock Market Double in 07

Foreign Investments on Romanian Stock Market Double in 07

Non-resident investors spent over EUR 226.4 million on the stock market in 2007, 33.8% more year-on-year. Foreign investments on the Bucharest Stock Exchange (BVB) reached EUR 1.66 billion, compared to last year’s EUR 845 mln, Business Standard daily reports.

In December, foreign investors sold over EUR 17 mln worth of stock, while local investors acquired an equal EUR 17 mln in stock. Individuals acquired EUR 52.6 mln worth of stock while legal entities spent EUR 84.5 mln and sold EUR 120 mln.

Foreign investors reduced their market holdings since August due to the US credit crisis, which led to drops on major international stock markets. The money that foreign investors pulled out is not likely to re-enter the market soon.

''I think we will see a neutral period. If January will enjoy growth it is possible that foreign investors will return, but this scenario is unlikely,'' said Iulian Panait, President of investment advisory company KTD Invest.

The sale by non-residents of stocks reached EUR 1.433 billion in 2007. In the first quarter non-residents sold EUR 385 mln worth of stocks. In November sales by non-residents outgrew acquisitions, at a total of EUR 60 mln, the largest value since the stock market was founded.

Two of the most important names that entered the market in 2007 were investment banks Lehman Brothers and Morgan Stanley, both targeting construction companies.

Lehman Brothers Real Estate Partners, part of the Lehman Brothers group, bought 3.08 percent of Impact Developer&Contractor for EUR 9.6 mln. Morgan Stanley bought a significant portion of real estate developer Imotrust Arad, listed on Rasdaq.

Morgan Stanley also took over 22.9 percent of cable producer Romcab Targu-Mures, and its investments amount to EUR 9.3 mln. The largest BVB investments were made by the American division of Swiss bank Julius Baer, at EUR 400 mln.

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