Press review (Sept 17)

Romania's national dailies of Wednesday focus mainly on the impact of the Wall Street crisis on the Bucharest Stock Exchange, short-term external debt going down, latest developments in Romania's exports of oil products, the release of a new Government bond issue, the local business environment.
In relation to the Wall Street crisis, Adevarul remarks that the hurricane in America has been felt as a strong storm in Romania; Ziarul financiar notes that the Bucharest Stock Exchange (BVB) has been seriously hit by the American crisis; Cotidianul notes that the American crisis has delivered a strong blow to the local currency and the Bourse, while Bursa remarks that the crisis is generating wider falls by the day.
Ziarul financiar reports that the Bucharest Stock Exchange (BVB) on Tuesday got a full feeling of the quake that has shattered the world financial markets, recording the most drastic daily decline in the past three and a half years on plummeting financial stocks.
The BET index of the best performing ten companies traded on the BVB lost 7.1% of its value, the biggest daily dip since march 2005, as shares in BRD, the largest Romanian bank floated there, took a 13% nosedive. Trade in Banca Transilvania shares were suspended from trade; the financial investment companies (SIFs) saw a 9% contraction in value, while the value of the shares in the main insurers listed with the BVB – Agras, Asirom, Ardaf amd Astra – plummeted some 82%.
"We can safely say the crash has happened in Romania. Analysts believe that when the bankruptcies will start rolling in, the world crisis might also end, which could lead at least to a halt in further decline of the stock exchanges externally and, implicitly, in Romania," Ziarul financiar quotes BT Securities Deputy General Manager Adrian Ceuca as saying.
On the other hand, the local current, the leu (RON), reacted moderately, as direct exposure of foreign investors was very little and forex outflows negligible, the paper says, adding that the market is still reacting nervously and the leu follows the regional depreciation trends.
Ziarul financiar remarks that Romania's short-term external debt has diminished for the first time in the past three years, citing to the point data with the National Bank of Romania (BNR) indicating a short-term external debt of 17.59 billion euros as of end-June 2008, which is 3.4% smaller than the March 2008 figures.
The correction occurred as a result of falling funding drawn by the local banks for the short run that went down some 700 million euros, to 7.8 billion euros. At the same time, companies only slightly increased their short-term borrowings, to 9.6 billion euros.
On the other hand, the paper says, despite the correction in the short-term funding, total external debt increased in the second quarter by 4.54 billion euros, to a new high of 65.6 billion euros.
Adevarul notes that in the first quarter of 2008, Romania turned into a big exporter of finished oil products. Romania's crude oil imports totaled 2.11 million euros, while its exports of refined oil products reached 1.5 billion euros. Official statistics indicate that Romania could meet from its domestic resources alone the demand for oil for other purposes than electricity and heat generation. But Romanian companies obviously preferred to export their finished products, be it for the only reason that profit is made from petrol and diesel fuel exports, not from crude exports, the paper argues.
Adevarul reports that the Romanian Ministry of Economy and Finance (MEF) will resume its Eurobond issue released this year, to raise an additional 250 million euros.
The paper quotes MEF state secretary Eugen Teodorovici as saying the Eurobond issue will be in late October – early November, and the maximum ceiling approved by the Government is set at one billion euro, 750 million euros of which was raised in June.
The MEF official is further quoted a saying conditions now are better on the financial markets and there will be a surplus of liquidity.
Bursa quotes Fitcth analyst Andrew Colquhoun as saying the business environment in Romania has staled over the past year, which would indicate that structural and institutional reforms have slowed down.
Colquhoun is further quoted as saying the situation is not serious in the short run because Romania enjoys the effects of the reforms it had to carry out to better the European Union, but in the long run Romania risks lagging behind once investment resume in other states.
Gindul remarks that Romania has walked up six places in the world's economic freedom rankings, to number 74.
Compared with 2005, the rise was six places, and 45 against 1994, according to the report on the rankings released by the Fraser Institute of Canada.
In terms of labour market regulations, Romania is 48th in the world and 112th in the world in terms of crediting.
As far as the quality of business regulations is concerned, Romania is 75th in the world.
Adevarul remarks that the frequency of purchases of own-brand products at supermarkets and hypermarkets continued to decrease this year, although Romanians would be very heavy buyers of such products, according to the findings of a recent Nielsen market survey.
Ziua notes that one of the mysteries of the Romanian communist regime that captured the imagination of investigators, journalists and the Romanian public seems to have been solved: the late communist dictator Nicolae Ceausescu did not have bank accounts abroad, and neither did his children. This is the conclusion of a two-year probe conducted by a special inquiry committee of the Romanian Parliament that sought clarifications over the presumed accounts of Ceausescu.
The final report to which Ziua points out, and which it cites in the article, is drawn up on testimonies of various heads of the institutions who would perform forex operations before 1989. According to them, the totalitarian state had a strict control on all the money coming in and getting out of the system, and then, Ceausescu would have no reason why to deposit money abroad since he was convinced that ha had full control over the domestic state of affairs.

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