South East European stocks ended lower over a volatile week, in line with world markets, amid an escalation in Russia-Ukraine tensions and as sanctions on Russia are starting to wreak havoc on global trade. Russia’s largest lender Sberbank said it was leaving the European market and around 660,000 refugees have now fled Ukraine to neighboring countries including Poland, Hungary, Moldova, Romania, Slovakia, Czechia and Greece.
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The Greek stock market’s ATHEX general index nosedived 11.38%. Amid the geopolitical turmoil, the bourse has lost some 10 billion euros of its capitalization in just seven sessions. Greece, the world’s largest ship-owning nation, has asked the International Maritime Organization (IMO) for an emergency meeting on ships and crews in the Black Sea and the Sea of Azov, due to the Ukraine crisis. Ukraine has shut its ports to maritime trade since February 25.
Stocks as measured by the BELEX15 index returned -1.35% for the week. Credit rating agency Fitch has affirmed Serbia at ‘BB+’ with outlook stable. The country’s GDP rose 7.4% in 2021 preliminary data showed while the unemployment rate dropped to 9.8% in the last quarter of 2021. On the banking front, local lender AIK Banka finalized acquisition of Sberbank Serbia. According to the central bank, Sberbank’s Serbian unit is highly liquid and well capitalised.
Romanian assets came under extreme pressure. On a weekly basis the benchmark BET index declined a considerable 11.61%. Since the beginning of Ukraine crisis, until March 3, at 24:00 hrs, 167,613 Ukrainian citizens entered Romania and 109,687 Ukrainian citizens left, according to the General Inspectorate of the Border Police (IGPF). In currencies, Romanian cental bank foreign exchange reserves fell to 41.87 bln euro in February, data showed.
Slovenia’s SBITOP was off 3.52%. On the banking front, Slovenia’s largest bank, NLB, has acquired the Slovenian subsidiary of Russia’s Sberbank in a move that the central bank said would preserve the financial stability in the country.
In Nicosia, the general index of the Cyprus Stock Exchange gave up 6.67%. On the macro front, the annual inflation rate in the island rose to 6.6% in February from 5.4% in the previous month. It was the highest inflation rate since November of 1992. In investment news, the European Investment Bank’s €200 mln funding for Cyprus this year is not affected by the Ukraine crisis, EIB Vice President Lilyana Pavlova said Friday.
Montenegro’s MNSE10 index declined 0.29%. The country’s foreign minister Djordje Radulovic said that Montenegro’s financial system and trade balance is unaffected by sanctions against Russia because they concern banks that have no operations in the country.
Bosnia bucked the trend with the SASX10 index climbing 1.61%. Bosnian banking agencies took control of Russia’s Sberbank subsidiaries. Sarajevo-based ASA Banka acquired Sberbank Sarajevo, the banking agency of Bosnia’s Bosniak-Croat Federation said late on Tuesday, while the the Serb Republic government acquired Sberbank Banja Luka on Monday. On the macro front, Bosnia’s annual inflation rate jumped 7% in January, official data showed.
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Bulgaria’s SOFIX index shrunk by 5.40%. Bulgaria’s Interior Ministry said on March 3 that since February 24 a total of more than 16 000 Ukrainian citizens had crossed the border from Romania into Bulgaria. In economic news, Bulgaria’s gross foreign debt up 4.8% in 2021, central bank data showed.
Equities in Croatia as measured by the CROBEX index returned -4.69%. On the banking front, Croatia’s central bank injected 260 million kuna (34 milliion euro) in local banks. The central bank’s foreign exchange reserves rose 30% y-o-y in January, data showed. Meanwhile, Croatian HPB took over Sberbank. HPB is one of the leading banks in Croatia, and back in 2021 it achieved the best result in 30 years of the bank’s history and a record net profit of 202 million kuna.
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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.