Southeast Europe’s markets plunged on news of the Russia-Ukraine military conflict, in line with all major bourses around the world. Investors sought shelter in safer investment solutions such as precious metals. Meanwhile, Ukraine’s neighbours like Romania, Moldova and Poland are preparing for the arrival of a wave of refugees. Countries in the region have also urged their own citizens to return home from Ukraine. The risk-off mood is expected to last for a couple of days as the market assesses the situation in Ukraine with volatility remaining elevated.
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The Athens Exchange (ATHEX) general index sank 3% this week. The benchmark index plummeted 6.42% on Thursday, its biggest daily decline in almost two years, with banks leading the losses and the market’s capitalization shrinking by some 4 billion euros. According to Kathimerini daily, Greek exports to Ukraine, amounting to €42 million per year, are under major threat, while the even greater amount due for delivery to Russia depends on the sanctions the European Union will decide to impose on Moscow in response.
Serbia’s stock market generated a negative return for the week. The BELEX15 fell 2.69%. Serbia’s President Aleksandar Vucic expressed support for Ukraine’s territorial integrity but won’t join West in sanctioning Russia. On the macro front, the annual inflation rate in Serbia climbed to 8.2% in January from 7.9% in the previous month and above market expectations of 8%. The country’s financial sector expects 3.95% year-ahead inflation, the central bank said.
On Bucharest Stock Exchange (BVB), by far the largest in the region, on a weekly basis the BET index plunged 2.24%. Romanian Minister of Defence Vasile Dincu announced on Tuesday that the country could receive up to 500,000 refugees from Ukraine if needed. Romania has a 600-km long border with Ukraine in the northeast of the country. Of the 10,624 Ukrainian citizens who entered Romania between 24-25 Feb 2022, 3,660 people have left the country, especially through the border crossings with Bulgaria and Hungary, Romania’s Interior Minister Lucian Bode said on Friday. The Romanian Civil Aviation Authority has closed, starting with 15:00 on Saturday, the Romanian airspace for all regular flights of operators registered in the Russian Federation. In other news, five new Bucharest-listed companies will be included in FTSE Russell indices dedicated to Emerging Markets on March 21.
Slovenia’s SBITOP index nosedived 8.51% this week. On Thursday, the index recorded its biggest fall in nearly two years. Sanctions against Russia will affect Slovenia’s exporters, who, according to initial estimates, exported commodities to Russia worth €900 million in 2021. The move will especially hit Slovenia’s pharmaceutical industry which accounts for 40 percent of Slovenia’s exports to Russia, HINA reported on Friday. Other companies in Slovenia that could be affected by the sanctions against Russia come from the electrical and engineering industries.
In Nicosia, the general index of the Cyprus Stock Exchange gave up 2.71%.The Central Bank of Cyprus (CBC) said on Saturday that all necessary precautionary measures have been taken to minimise any impact of the Ukraine conflict on the Cypriot financial system. The CBC added that the analysis of the potential impact and any possible risks is continuous. Meanwhile, Cypriot banks have said that the sanctions so far do not pose any particular problem.
In Montenegro, equities came under pressure with the MNSE ending the week 1.93% lower. In economic news, annual inflation rate in the country increased to 5.7% in January, the highest since December of 2018, from 4.6% in December, the statistical office said. On a monthly basis, consumer prices increased 1.3%. The IMF Executive Board concluded 2021 Article IV consultation with Montenegro, saying the country’s economy is rebounding while the financial sector appearing to have withstood the Covid-19 shock well. It added uncertainty surrounding the projections is exceptionally high.
Bosnia’s stock market returns were negative. The SASX10 index shrunk by 2.91%. The turnover on the Sarajevo Stock Exchange this week amounted to 775.840,76 KM. A total of 356.199 securities were traded in 68 transactions.
SKOPJE, N. MACEDONIA
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Bulgarian assets fell with the SOFIX index slumping 2.70%. Airlines scrambled to adapt to conflict in Europe on Thursday as Ukraine closed its airspace. The expected growth of air traffic in Bulgarian air space is about 40%, the Bulgarian Air Traffic Services Authority said. Bulgaria imposed a ban on the take-off/landing and entry of Russian aircraft into the country’s airspace. The ban is in force from 00.00 on Saturday. Meanwhile, the Bulgarian government launched a single information portal to help those leaving Ukraine, the first such portal in the EU.
Croatian stocks as measured by the CROBEX index returned -3.72%. The country’s gross domestic product advanced by 9.7% year-on-year in the fourth quarter of 2021, easing from a 15.8% expansion in the previous period. On a seasonally adjusted quarterly basis, Croatia’s GDP contracted 0.1%, after a 1.4% growth in Q3, the Croatian Bureau of Statistics 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.