Equities in South East Europe turned in a mixed performance this week with the past five trading days having been marked by volatility. Investors took in stride a new round of sanctions against Russia, including a landmark embargo on Russian coal imports. Traders also reacted to European inflation data as the European Central Bank minutes showed that patience in dealing with inflation was wearing thin.
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Greek stock market returns were positive this week. The Athens Exchange (ATHEX) general index added 1.75%. Inflation in the country soared in March to levels unseen since June 1995, reaching 8.9% on an annual basis, the Hellenic Statistical Authority (ELSTAT) announced on Friday. In a separate release ELSTAT said Greece’s trade deficit in February stood at 3.12 billion euros, up 171.8% year-on-year. A day earlier, the Bank of Greece cut its forecast for economic growth to 3.8% this year from 4.8% earlier and raised its forecast for the inflation rate to 5.2% under the base scenario. In other news, Bulgaria and Romania requested and obtained access to the DESFA Liquefied Natural Gas (LNG) station in Revythoussa off Athens, sources inside the Environment and Energy Ministry said on Friday.
Serbian equities were also in the green with the BELEX15 returning 1.43%. In politics, Serbia’s incumbent President Aleksandar Vucic won the presidential vote last Sunday. Vucic and Russian President Vladimir Putin agreed to shortly discuss a new gas deal, as Serbia’s contract expires on May 31. Serbia gets all its gas imports from Russia and Gazprom is majority owner of the country’s sole gas storage facility. In other commodities news, Serbia extends its fuel price caps through April and allows wheat and maize exports to North Macedonia. On the banking front, Serbia’s central bank increased its key repo rate to 1.5% while Erste sees the central bank lifting the key repo rate to 2% by end-2022.
In Romania, stocks as measured by the BET index returned -0.50%. Fitch Ratings affirmed Romania´s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BBB-‘ with a Negative Outlook. Romania’s GDP grew 5.9% in 2021, preliminary data showed. Meanwhile, Romania will allocate total 45 mln lei (9.1 million euro) to partly cover private costs for Ukrainian refugees, the Prime Minister said and the government is also preparing a 3.5 billion euro support package to offset the looming economic crisis, according to the Socialist Party leader. Next week, David Malpass, President of the World Bank Group, will arrive in Bucharest on April 13, for a two-day visit, which will be his first trip to Romania as World Bank Group President.
Slovenia’s equities were also lower. The benchmark SBITOP index was off 0.58%. After last year’s high economic growth of 8.1%, favourable economic trends continued in Slovenia at the beginning of this year, Banka Slovenije said on Tuesday. However, the war in Ukraine and the subsequent sanctions have worsened the economic outlook. Risks of prolonged periods of high inflation have increased markedly, it added. Slovenia reported 260 million euro budget deficit in Q1 and the country is in talks to increase wheat imports from Serbia.
Cypriot stocks fell for the week. The General Index was down 0.60%. Cyprus’ annual inflation rate rose to 7.1% last month, from 6.6% in February, the fastest rise in consumer prices since September of 1992, according to the Statistical Service of Cyprus (CyStat). Meanwhile, the number of property sales in March rose 33% compared to a year earlier, for the highest March figure recorded since 2008, Kathimerini in Cyprus reported. Sales during the first quarter of 2022 reached 3,009, up 52% y-o-y.
Montenegro’s blue-chip MNSE 10 index was lower by 0.14% on Friday. Lender Hipotekarna Banka joined the MNSE10, following under a regular revision of the index, the Montenegro Stock Exchange (MNSE) said in a statement on Monday. The weight of Hipotekarna Banka in the index was set at 15.32%. The revision of the MNSE10 was carried out based on trading data from September 30, 2021, to March 31, 2022. On the macro front, Montenegro’s unemployment rate dropped to 23.0% in March, official data showed. And the European Central Bank extended liquidity line with Montenegro’s central bank to January 2023.
Bosnia’s SASX10 index was higher by 0.36% this week. The EBRD has approved a new country strategy for Bosnia and Herzegovina that will define the bank’s investments there in the period 2022-27. The strategic priorities will be: to strengthen the role of the private sector, including through the upgrade of skills and digitalization; to close key infrastructure gaps, pursuing governance improvements and further regional integration; and to support energy diversification away from coal and promote a low-carbon transition.
Bulgarian stocks as measured by the SOFIX index decreased by 1.19% this week. Bulgaria’s Ministry of Finance lowered the country’s 2022 growth forecast to 2.6% on Ukraine war impact and saw annual average inflation under the EU-harmonized index at 10.4% from a previous 5.6% this year. “The military conflict led to an increase of the prices of energy and key raw materials, which will have a negative impact on households purchasing power,” the ministry said in a statement.
SKOPJE, N. MACEDONIA
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Croatian equities led the gains in the region with the CROBEX jumping 2.00% over the week. Croatia’s central bank foreign exchange reserves rose 35% y-o-y in February, official data showed. Meanwhile, the country’s M1 money supply was up 17.4% during the period under review. Other data releases, showed Croatia’s trade gap widened 35% y-o-y in January-February, while Croatia’s industrial PPI was up 19.5% y-o-y in March.
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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.