Mixed funds resisted best in the aforementioned period, with gains reaching 0.9 percent, as in the case of BCR Monetar. The Active Dinamic equity fund, the most successful this year, was protected from decline because its portfolio contains several RASDAQ market [Ed. n. over-the-counter] companies, much less liquid than the financial investment companies (SIF), and therefore much less volatile.
Brokers say that the end of the seven consecutive months of positive yields for most of the shares traded on BVB is due to international declines, as well as local political instability. “I expect the market to continue its decline in the short-run. There is a series of unpredictable factors which investors are not willing to consider at this time. Furthermore, the tax on capital market gains will go into effect next year, so, understandably, there will be many who will try to make a profit in the last two months of 2009,” said Rares Nilas, General Manager of BT Securities.
Among the factors contributing to the market’s instability, Nilas mentioned the possibility of a depreciation of the leu towards the end of this year, if the state does not receive the third tranche from the International Monetary Fund stand-by agreement, worth €1.5 billion. “The IMF tranche is dependent on a budget being drafted by 10 December, which is fairly difficult to do in the present political climate. If we do not receive these funds, Romania will have to borrow from local banks. This move could unbalance the exchange rate, and then the effects would be noticeable on the capital market too,” Nilas added.
