Adrian Negru, Raiffeisen Asset Management: "Long-term, recurring investments in quality companies are the secret of success"

Long-term, recurring investments and quality companies such as those on the Bucharest Stock Exchange represent the secret of successful investments in shares, says Adrian Negru, CEO of Raiffeisen Asset Management.

The fund manager stated: "Investors must take into account the fact that the reaction of the stock markets is not necessarily correlated in the short term with the fundamentals of the companies. I'd say it's almost never correlated. The kind of events like the decline at the beginning of August are more related to the emotions and feelings that some market participants are experiencing. As an investor I would ask myself the question «Do I want to let my long-term financial well-being depend mainly on the emotions that govern the market at a given moment?» I think the answer is obvious. Personally, I would always take a step back and look at the long term. I think it's important to have something to build on - for example the fundamental analysis of companies - so that you can ignore the momentary noise of a correction, which can sometimes be deafening."

Adrian Negru added: "There are few things that we can say with certainty when it comes to the stock markets, but that recurring investment cannot fail is one of those things that we can strongly say. It is also important to keep a long-term perspective and keep in mind that equity markets, and especially the local equity market, will outperform any other asset class. Long-term, recurring investments in quality companies such as those listed on the local market are the secret of success".

• "Once the road to monetary relaxation is opened, I expect economic activity in the euro zone to improve"

The CEO of Raiffeisen Asset Management expects that, from the point of view of monetary policy, the positive impact for our stock market will rather come from outside Romania.

"It is already a certainty that we will see interest rate cuts in the United States that will probably be successive. This will also pave the way for the European Central Bank which took a first step in this direction, but could not do more if its policy was not correlated with that of the Federal Reserve. In the euro zone, which is Romania's main economic partner, we are talking about quasi-stagnation in the last two years, due to high interest rates and very high energy prices. To some extent I expect we will see an improvement; we are already seeing an improvement in the price of energy, and once the road to monetary relaxation is opened I expect economic activity in the Eurozone to improve as well, which will have a positive impact on us. We will probably also see a slight relaxation of monetary policy at the local level. Therefore, in relative terms, stocks will have some favorable factors. It also remains to be seen how quickly the budget deficit issue will be addressed, which will probably happen after the elections. Overall, I am moderately optimistic for the near future", said Adrian Negru.

From his point of view, if the good evolution of shares at the Bucharest Stock Exchange over the last year and a half was rather "in corpore", in the future we will have greater discrepancies between sectors and between companies.

"The situation will clearly be more heterogeneous and the discrepancies will be greater than they were in the past," said the fund manager. The Managing Director of Raiffeisen Asset Management also pointed out that the performance of our equity market from the beginning of 2023 to date has been exceptional, but we need to calibrate our expectations as things are likely to be more subdued in the future. "In the future, it will be important for investors to allocate a significant part in equity funds or in Romanian equities in general", said Adrian Negru.