Erste: Analysts Expect RON, BET Index To Rise

With the support of Erste Bank der oesterreichischen Sparkassen AG in Vienna, the Centre for European Economic Research (ZEW) in Mannheim has carried out a survey of financial market experts on the economic situation and financial markets in Central and Eastern Europe for the first time ever. The expectations and forecasts of the survey respondents for the CEE financial markets reflect solid current performance by the economies in the region and a positive outlook for the coming six months.

This new indicator compiled by ZEW in cooperation with Erste Bank pertains to the following countries: Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Serbia and Slovakia. At the time being, 61.9% of the participants viewed the economic situation as good. The majority of the respondents were also optimistic with regard to economic expectations for the next six months. On the whole, 25.0 per cent expected further improvement in the economy, with 68.3 per cent expecting no change and just 6.7% expecting a deterioration. Hence, the balance of the positive and negative expectations for this indicator is at 18.3 points. In most of the countries under review and for the region as a whole, the financial market experts anticipated an increase in inflation rates (the indicator was 25 points). The highest positive outturns for this indicator were found in the Czech Republic (64.2 points) and Poland (56.4 points). In contrast to this, those surveyed for Hungary and Slovakia were anticipating a decline in inflation rates (-48.3 points and -7.1 points).

Financial market experts were most optimistic about the development of the CEE equity markets. While 80 per cent of the respondents expected a rise in the NTX index, which is comprised of certain selected stocks from the region under review and was developed by Erste Bank and the Vienna Stock Exchange, only 4.4 per cent anticipated a decline in the index. As a result, this indicator was at 75.6 points. According to experts" expectations, positive development is forecast in the equity markets in Slovenia, Romania and Croatia in particular. The corresponding indicators for these markets were 86.1 points, 77.9 points and 76.0 points, respectively.

The majority of the experts participating in the survey expected to see appreciation of the national currencies in their respective countries. Based on the results of the survey, this appears to be most likely for the Polish zloty and the Slovak koruna.