The most optimistic brokers said that the main shares on the Stock Exchange could climb by up to 40 percent in the coming months, but, at the same time, others said that investors should be prepared for a correction, considering that there is no clear reason for these increases on the local market.
“I believe that we will witness further sharp increases by year-end. On the main indexes, we may gain 30-40 percent compared to the present values,” Octavian Dragolea, Manager within the IFB Finwest brokerage firm, said.
According to him, there is no specific event responsible for the upward trend of the local market, which followed the evolution of foreign stock markets.
“Volatility will be higher than in the first half of 2009. In the coming two months we will have bigger turbulences, meaning we will see both declines and increases, and afterwards, it is possible to stand at a higher level than today. However, risks remain high,” said Florin Ilie, Head of Capital Markets within ING Bank Romania.
The steep increases registered in the past few months raised the prices of shares, but at the same time the financial situation of companies worsened, according to the reports on the first six months.
“There is increasingly less room to grow on the Stock Exchange, if we look at the results of companies in the first half of 2009. At present, many companies seem rather expensive. If profits drop 30-50 percent at all companies in 2009, then, the market’s PER [price to earnings ratio] would exceed 10, and then it is difficult to say that there is room for growth,” Mihai Caruntu, Head of the Capital Market Research department within Banca Comerciala Romana, said.
