Bucharest Stock Market Hit by Political Uncertainty Ahead of Presidential Runoff

The Bucharest Stock Exchange continues to reel from political uncertainty, with volatility expected to persist until the conclusion of Romania's presidential runoff, brokers told AGERPRES on Wednesday, CE Report quotes Agerpres

Recent sessions have seen significant corrections, with companies in the BET index and its associated ETF erasing most of their annual gains. "The correction reflects political instability and concerns over potential fiscal measures in 2025 that may impact listed companies," noted Alexandru Dobre, Deputy General Manager of TradeVille. However, he highlighted that current prices present opportunities for investors, with some stocks trading over 40% below analysts' target prices. Historically, December has been a favorable month for the market, often showing an average gain of more than 3%.

Alin Brendea, an analyst at Prime Transaction, reported sharp declines early Wednesday, with the BET index plunging over 3% due to investor unease about governance uncertainties and potential challenges to Romania's EU membership. Statements from a presidential candidate about revisiting privatization deals also heightened concerns. However, a recovery trend emerged later in the day, fueled by optimism about a potential pro-European parliamentary alliance.

The market has shed around 8% since the first presidential round, but analysts emphasize that the volatility is driven by emotional reactions, not panic, as trading volumes remain moderate. Ovidiu-Lucian Isac, General Manager of Estinvest, described this period as a buying opportunity, especially for stocks in sectors like energy and banking, which have shown robust nine-month performance.

Antonio Oroian of Goldring noted that investors remain cautious, closing positions and waiting for clarity. "Even with a favorable election outcome, challenges will persist until a government is formed and concrete measures are taken to address economic deficits and imbalances," Oroian warned.

The outcome of Sunday's runoff and the subsequent government formation will be critical in shaping the market's trajectory for the rest of the year.