Alin Brendea: The scenario of a V-shaped economic recovery seems increasingly remote

Reporter: What is your opinion on how stocks have evolved in 2011?

Alin Brendea: Unfortunately this was once again a year where volatility was the order of the day. The year 2011 definitely had two parts, the first with positive evolutions, followed by a second one where we had significant drops, sometimes very steep. Overall, a year which brought about new market drops and which can be described as disappointing.

Reporter: What were the main factors which influenced the evolution of stocks this year?

Alin Brendea: The evolution of the shares was directly influenced by the instability which established itself on the international markets in the second half of the year. The negative influence was significant and cancelled any positive effects that the Romanian macroeconomic data could have offered to the Bucharest stock market.

Another important factor was the listing of the Proprietatea Fund, as well as the failure to sell the block of shares of OMV Petrom. On a small market any operation of that nature can cause significant changes in liquidity and in the general interest towards the market.

Reporter: Which stocks were this year's "stars"?

Alin Brendea: Definitely the Proprietatea Fund, which monopolized the top spot in terms of liquidity in almost every trading session. When it comes to the trading price remarkable evolutions were seen by companies in the industrial sector such as Azomureş or Oltchim. The financial sector was definitely on the other end of the spectrum, posting one of the weakest evolutions ever this year.

Reporter: What were the good and the bad elements of the year?

Alin Brendea: When it comes to the good, we can mention the increase in liquidity provided by the listing of the Proprietatea Fund. Also, the increase in the notoriety for structured products is a salutary event which has improved not only market liquidity but also the way that investors can place their available cash.

Some of the drawbacks of the year also include the negative evolution of the stock market indexes as well as the failure of the stock sales which the government had announced for the current year.

Reporter: What are your predictions for the evolution of the domestic stock market in 2012?

Alin Brendea: The scenario of a V-shaped economic recovery seems increasingly remote, meaning that 2012 doesn't leave much room for gushing optimism. It is still to be expected that the international markets would stabilize after this year's drop. As a result, the Romanian market may no longer suffer the negative influences of the international evolutions. In this respect, the domestic market may see a slight rise next year. For the first part of 2012, the promise of high dividend yields could be a catalyst for those who have cash available into paying greater more attention to the stock market.

Reporter: Which sector do you believe is worthy of investors' attention in 2012? Why?

Alin Brendea: Since we are still in an uncertain economic stage, defensive sectors could be recommended to investors. The energy or utilities sectors could be an inspired choice as they have issuers with solid financial results and an attractive dividend policy. Also, the shares of the SIFs in the event of the change in the holding limit could also represent an interesting option for investors in the coming year.