South East Europe stock markets

Overall gains for SEE markets but caution remains


Stock markets in South East Europe remained volatile this week as trading was dominated by European Central Bank news but most of them managed to post positive returns. The Frankfurt-based institution is no longer ruling out a rate hike this year as Eurozone inflation hit a new peak of 5.1%. Bucharest Stock Exchange (BVB) lead the gains in the region.

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Greek stocks as measured by the ATHEX index returned 2.23% this week. Greece plans to repay 1.8 billion euros ($2.03 billion) in IMF loans ahead of schedule, two officials, who spoke on condition of anonymity, told Reuters on Thursday. In addition, it would repay some 5.3 billion euros in loans from Greece’s eurozone partners by the end of the first quarter. However, the country posted EU’s second-highest unemployment rate in December (12.7%) after Spain (13%), Eurostat data showed.


Equities at Belgrade Stock Exchange finished the week in the green. On a weekly basis, the BELEX15 advanced 0.53%. Serbia expects 4.5% GDP growth in 2021 the government said while flash data showed that GDP rose 6.9% y-o-y in the last quarter of 2021. Meanwhile, the budget gap narrowed to 286 billion dinars (2.4 billion euros) last year and the public debt-to-GDP ratio was little changed y-o-y at the end of 2021. In fixed income markets, Serbia will auction 50 billion dinars (425 million euros) of 2-year Treasury notes on February 8.


Bucharest Stock Exchange’s blue-chip BET index jumped 2.26%. The Romanian Senate adopted on Wednesday (Feb. 2) a legislative proposal aimed at simplifying the taxation of equity gains investors make on the local capital market. The legislative proposal will go to the Chamber of Deputies, the decision-making forum. In currencies, Romanian central bank’s forex reserves stood at 43.1 billion euros in January.

In other news, Romania’s unemployment rate increased to 5.4% m-o-m in December, National Institute of Statistics showed. In a separate release the INS said Romania’s 2021 retail sales rose 10.1% in 2021. The country also posted the highest PPI growth y-o-y in December among EU states in SEE, Eurostat data showed while industrial producer prices jumped 33.3% y-o-y. In fixed income markets, Romania will issue 5.9 billion lei (1.2 billion euro) of domestic debt this month.

Bet Index
(Bucharest Stock Exchange’s BET index led the gains in the region)


Slovenian stocks as measured by the SBITOP index returned 0.45%. The government adopted a 70 million euro aid scheme to soften energy costs’ impact. Meanwhile, the country’s budget gap narrowed to 5.8%/GDP in 2021, according to the Ministry of Finance. On the banking front, the European Central Bank reduced the capital requirement for Slovenian lender NLB. And the European Investment Bank Group, consisting of the European Investment Bank (EIB)  and European Investment Fund (EIF) invested a record-high 257 million euro in Slovenia in 2021, the Group announced on Thursday.


In Nicosia, the general index of the Cyprus Stock Exchange fell 1.76% . On the banking front, total new bank loans in Cyprus increased by 22.2% in 2021 compared to the previous year, reaching 2.9 billion euros, according to the Central Bank of Cyprus (CBC). Lenders in the island have excess liquidity of 21.7 billion, with deposits having increased in 2021 by 3.13 billion euro data also showed. Banks have come under fire for being hesitant to redirect the cash flow back into the capital-starved economy through lending to new and existing businesses.


Montenegro’s bourse ended the week with a loss of 0.38%. Lawmakers ousted the government on Friday following months of building tensions in the small Balkan country.  Prime Minister Zdravko Krivokapic and his cabinet collapsed after only 14 months in power. The government was accused of sluggish handling of the COVID-19 crisis, failing to bring in investments and create jobs, and a slowdown in European integration.


Bosnian stocks were lower this week with the SASX10 index losing 0.17%. The turnover on the Sarajevo Stock Exchange (SASE) this week amounted to 468.406,47 KM. A total of 173.217 securites were traded in 60 transactions. SASE’s turnover fell 70% m-o-m in January, bourse data showed. In currencies, Bosnia central bank’s net forex reserves rose 18% y-o-y in December while the country’s end-2021 M1 money supply was up 15.7% y-o-y.


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Trading in the Bulgarian stock market in the first week of February was marked by increases in the leading share index. The SOFIX returned 1.97%. On the macro front, the Bulgarian central bank lowered its 2022 GDP growth focast to 3.6% while the government submited the 2022 budget draft to parliament and plans to invest 4.1 billion euro. The Minister of Finance expects 480.6 million euro budget surplus at the end of January. On the banking front, Bulgarian banks’ net profit was up 74% last year and Bulgarian regulator cleared the acquisition of Raiffeisenbank Asset Management by KBC Bank.


Zagreb’s CROBEX index ended the week with a rise of 0.29%. Scope rating agency affirmed Croatia’s credit rating at BBB- and improved outlook to positive. In currencies, Croatian central bank forex reserves rose 32% in 2021, data showed while the country’s M1 money supply was up 18.3% y-o-y in December. In fixed income markets, Croatia will offer 1.6 bln kuna (213 million euro) of T-bills on February 8.

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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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