Stock Exchange president: Foreign participation to BVB down from 40 to 28%

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Foreign investors have been a major factor for the boost of liquidity on the Bucharest Stock Exchange (BVB), but in 2008 foreign participation to total purchase-sale deals dropped form 40 to 28%, BVB president and director general Stere Farmache told a press conference on Thursday, Sept. 4.
On the other hand, despite declining foreign purchases on the domestic exchange, sales and acquisition deals kept in a balance, except for January, when foreigners sold massively.
 
In Farmache’s opinion, the slump in the level of acquisitions by non-residents was the first reaction to signals from financial international markets that were struggling with a crisis.
However, foreign capital outflows through sales were offset or even exceeded by incoming fresh capitals to the market.
The BVB official also suggested that BVB investors have a preponderantly speculative behavior.
 
Although he didn’t say that directly, Farmache said that BVB lacks a solid and stable component of institutional investors who should lay stress on the economic performance of listed issuers.
According to data centralized by the National Securities Commission (CNVM), foreign capital inflows to the Stock Exchange stood at 296 million euros (1.086 bln lei) in H1 2008, by 53% more than outflows, which stood at 192.83 million euros (709.3 million lei).
 
Purchases performed by foreign investors in the first half of 2008 on the Romanian capital market totaled 401.37 million euros, respectively 1.47 bln lei, and sales on the local capital market hit 409.06 million euros (1.5 bln lei), with net sales standing at almost 7.7 million euros.
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