SEE Markets

Choppy week for SEE stocks fueling further anxiety


Southeast Europe’s equities finished a wild week lower as the intense volatility the has ushered in the new year continued.  Ukraine tensions continued to cast a pall over the region while the upward course of inflation and central bank interest rates remaining the main factors affecting the trading mood. On the bright side, Bulgaria, Croatia and Romania got the green light to begin OECD accession discussions.

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Equities at Athens Stock Exchange finished the week in the red. The General Index returned -1.91%. In other investment news, JPMorgan Chase & Co announced on Tuesday it was acquiring approximately 49% of the Greek payments fintech Viva Wallet. The US financial giant also said it is willing to expand its office in Greece.

Meanwhile, the European Bank for Reconstruction and Development’s investments in Greece totaled 838 million euros last year, the London-based institution said, making the country one of its top five funding recipients.

On a weekly basis the BELEX15 index shrank 0.63%. Serbia and the Belgium-based Euroclear signed a term sheet on Monday to establish the appropriate market conditions for the creation of a Euroclearable market link which would help lure foreign portfolio investments.

On the macro front, the average net monthly wage in Serbia stood at 69,136 dinars (approx. 587.95 euro) in November 2021, rising by 13.5% in nominal terms and by 5.6% in real terms compared to the same month of 2020, the national statistical office RZS announced. In a separate release the RZS said the unemployment rate in the country increased 2.6% in 2021.

The Bucharest Stock Exchange (BVB) blue-chip BET index returned 1.41% over a holiday-shortened week. The local bourse was closed on Monday in observance of the Day of the Unification of the Romanian Principalities.

In currencies, CFA analysts see the Romanian Leu at 5.08 units versus the euro in the next 12 months. Annual inflation rate is seen at 6.06% while the analysts maintain 2021 GDP growth estimate at 6.6%.

According to OECD predictions, Romania’s economy grew by 6.3% in 2021 and is expected to grow by 4.5% in 2022 and 2023. The country posted a budget gap of 6.72% of GDP in 2021.

In other news, the net assets of the 234 domestic and foreign open-end and closed-end investment funds operating in Romania grew by 4.7% last month while the countries M&A market value jumped 32% last year, according to EY.

Stocks in Slovenia plunged this week with the SBITOP index shrinking by 3.84%. According to the country’s central bank the economy still faces macroeconomic risks as high energy costs and higher inflation are already reducing the real growth of household income.

SEE stocks
(Stocks in Slovenia led the losses this week)

On the bright side, domestic demand is significantly stronger than the eurozone average, the central bank said. Meanwhile, Slovenia’s economic sentiment indicator rose in January and retail sales rose 18.9% in 2021, official data showed.

The Cyprus Stock Exchange General Index was up 1.88%. On the macro front, the Cypriot economy is expected to remain robust in 2022 as real GDP is projected to expand by 4.1%, according to the University of Cyprus Economic Outlook. For 2022, the growth forecast is similar to the European Commission (4.2%) and slightly higher than the projection published by the Central Bank (3.6%). CPI inflation is projected at 2.6% in 2022.

Stocks in Montenegro returned 0.29%. On the banking front, Montenegro repaid the second instalment of China’s Exim Bank loan. In economic news, industrial output grew 4.9% in 2021 while real average net wage fell 0.9%. Retail sales rose 12.7% y-o-y in the fourth quarter of 2021, statistical data showed.

The benchmark SASX10 shed 0.28% this week. In economic news, Bosnia’s industrial output was up 10.7% in 2021 while the country swung to average annual inflation of 2.0% last year. In the last month of 2021, industrial producer prices were up 10.3% y-o-y, official data showed. Building permits were up 5.4% in 2021.

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Bulgaria’s stock market returns were negative for the week. The SOFIX index slumped 2.03%. Last week, Fitch Ratings affirmed Bulgaria ‘s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BBB’ with a Positive Outlook.

On the macro front, Eurostat data showed that Bulgaria’s minimum wage (€332)is the lowest in the EU as of January 2022. Earlier this month, at a discussion forum on restricting low-paid labour, data were made public that over 870,000 people in Bulgaria receive minimum monthly pay, or close to that sum, according to Bulgarian National Radio.

Croatian equities as measured by the CROBEX index returned -1.81%. The index gained 19.6% in 2021, Zagreb bourse data showed while Croatian pension funds net assets rose 11.9% in 2021.
On the banking front, Croatian credit institutions boosted their overall profit by 59.3% year-on-year in the first nine months of 2021, to 4 billion kuna (531 million euro), central bank data showed.

In other economic news, Croatia’s industrial sales were up 14.5% y-o-y in November while retail sales volume was up 12.1% in 2021. The country’s GDP 2021 growth is seen at 11% the Institute of Economics Zagreb (EIZ), said.

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Kyriaki Balkoudi is a markets editor for World Markets Daily. She has a bachelor’s degree in Balkans Studies from Aristotle University of Thessaloniki, Greece and a master’s degree in International Politics from City University London, UK.

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