Valuations from the BSE exceeded the growth of international markets

The indices of the Bucharest Stock Exchange (BVB) had significant increases in March, above the appreciation of international markets, in a month in which the attention of investors in our capital market was captured by the notices published by companies.

The BET index, of the twenty most liquid stocks on the BSE, ended March at a new all-time high of 17,025 points, after a 7.1% increase. The BET-BK index, the performance benchmark for equity investment funds, advanced 5.3% to 3,116 points, while the BET-NG index, of energy and utilities companies, rose 8.2 %, up to 1,226 points.

• Traders see more than 60% chance Fed will cut rates in June, according to CME FedWatch Tool

In the United States, the S&P 500 index rose 3.1% in March, while for the first three months the stock basket's advance was 10.1%, the best quarter in five years. The Dow Jones Industrial gained 2.1% last month, and the Nasdaq Composite technology index gained 1.8%.

Companies with activities related to artificial intelligence continued their appreciation that began in the first part of last year, with shares of Nvidia, a maker of graphics processors used in AI applications, climbing 14.2% in March. Shares of Microsoft and Alphabet (Google's parent company) also saw significant gains. Inflation, measured by the Consumer Price Index, was 3.2% in annual dynamics in February, above economists' estimates, while in monthly dynamics the index rose to 0.4%, in line with expectations.

The Federal Reserve left its key interest rate unchanged but signaled it expects three rate cuts this year. Late last week, traders were giving a 61 percent chance the Fed would cut interest rates by 25 basis points at its June meeting, according to the CME FedWatch Tool.

On our side of the Atlantic, the Stoxx 600 index advanced 3.6% in March, ending the month at a new all-time high in a climate marked by easing inflationary pressures. In February, the Consumer Price Index was 2.6%, in annual dynamics, below the level of 2.8% from the previous month. A year ago, the index was 8.5%, according to Eurostat data.

• At least 80% of the companies in the BET want to allocate dividends to shareholders

At the Bucharest Stock Exchange, the companies announced their dividend proposals, income and expenditure budgets for this year alongside other corporate events, with a specific impact on the price of issuers' shares. By the end of last week, out of the twenty companies that are part of the BET index, eighteen had called the shareholders to the balance sheet meetings, sixteen of which had proposed the allocation of dividends.

Energy producers have, in most cases, come up with dividend proposals with significant yields, as have banks. At the opposite pole, MedLife and TeraPlast do not have cash allocations to shareholders on the agenda of the convenors.

• Electrica - the best evolution in BET

Shares in Electrica (EL) rose 13.8% last month, the best performance in the BET, most likely as a result of the stock entering the FTSE All-World, FTSE Global All-Cap and FTSE Global Total indices -Cap, starting on March 18. Moreover, the volume of almost five million securities recorded in the May 15 meeting, the largest since the listing, clearly points to purchases made by institutional investors who aim to replicate the structure of the indices of the British rating agency.

Romgaz (SNG) shares appreciated by 12.2% last month, the second best performance in the BET. The company's management recommends distributing only 20% of the profit as dividends because it needs money for investments, but the decision rests with the Ministry of Energy, the majority shareholder of the gas producer. Romgaz proposed two dividend options, of 0.3561 lei per share, respectively 0.1425 lei (corresponding to the allocation of 20% of the profit), the gross yields being 6.4% and 2.5%, respectively, according to the calculations which take into account the increased capital of Romgaz on the date of registration.

The company is looking to expand its electricity and natural gas operations, according to a shareholder meeting notice earlier this month.

The management of Hidroelectrica (H2O) proposed to distribute all last year's profit to dividends, namely a dividend of 13.99 lei, with a gross yield of 10.4%, compared to the last price of the share in March. In March, the shares of the electricity producer and supplier appreciated by almost 8%, to 134 lei.

In a month in which the price of Brent oil rose by around 7%, shares of OMV Petrom (SNP) appreciated by 9.2%. The company proposed a dividend with a gross yield of 6.1% from the last share price in March and announced plans to propose additional dividends as well. The management of Nuclearelectrica (SNN) wants to distribute a dividend with a yield of 7.5%, which is similar to the proposal of the management of Conpet, compared to the closing prices of the two shares at the end of March.

• Valuations for banking stocks

In a month in which the Euro Stoxx Banks index appreciated by 14%, the shares of Banca Transilvania (TLV) appreciated by 7.1%, while the BRD-Groupe Societe Generale (BRD) titles had an advance of 11 .9%.

The credit institution from Cluj wants to grant a dividend with a yield of 4.5%, along with a capital increase by incorporating some reserves, which involves the allocation of 148 free shares to 1,000 held. The BRD Council proposed that 60% of last year's profit should go to dividends, which is equivalent to a gross return of 6.5%, but the French from Societe Generale, who are the majority shareholders of the bank, requested the distribution of only 50%, which means a gross return of 5.4%, compared to the last price of the securities in March.

• Aquila shares continued their upward trend

The shares of the distribution and logistics company for the consumer goods market Aquila (AQ) continued their upward trend started at the beginning of last year, with an increase of 11.2% in March, to a new historical record of 1.24 lei. The management of the issuer proposed the distribution of a dividend of 0.07084 lei, equivalent to a gross yield of 5.7%. The orderly uptrend suggests steady purchases of AQ stock by institutional investors.

The shares of Sphera Franchise Group (SFG), a company that brings together the KFC, Pizza Hut and Taco Bell restaurant chains under its umbrella, rose by 6.9% last month. The issuer wants to allocate a dividend of 1.05 lei from the undistributed result of the years 2020-2023, equivalent to a gross yield of 3.6%. The company has budgeted 12% more revenue this year and 6% higher net profit compared to 2023. It should be noted that, starting this year, the contributions to the mandatory private pensions have increased from 3.75% to 4.75%, so that the managers of the Pillar II funds have more money to invest, which can be seen in the price of the main shares on the BSE.

• Trading discounts between 70% for Infinity Capital Investments and 51% for SIF Muntenia

The BET-FI index, of SIFs plus Fondul Proprietatea, had an increase of 7.2%, up to 60,771 points, as all the components of the share basket appreciated last month.

The Bucharest Court of Appeal annulled the decision of the Ministry of Transport regarding the capital increase of Bucharest Airports, which would have massively reduced Fondul Proprietatea's stake in the company, from 20% to 0.7%. At the end of March, FP shareholders approved the management contract with Franklin Templeton for a period of one year, with the modification of the manager's basic commission to 1.35%, as requested by the Finances, but the point that stipulated that the strategy applicable to the fund should include the preservation the current portfolio was rejected.

Franklin Templeton proposed the allocation of a dividend of 0.06 lei per share, equivalent to a yield of 11.5%, a point that will be subject to a shareholder vote on April 30.

Among the former SIFs, Transilvania Investments and Evergent proposed dividends and share buybacks to shareholders to reduce the share capital. Lion Capital Group, SIF Muntenia and Infinity Capital do not distribute dividends, and the buybacks they do are only to reward the management of the companies with free shares.

The former SIF Banat-Crişana was sued by the London company Lion Capital LLP for using the name Lion Capital.

At the end of the month, the SIFs traded at discounts between the price and the Net Asset Unit Value (VUAN) between 70% for Infinity Capital Investments and 51% in the case of SIF Muntenia. For FP, the discount was 21%, slightly above administrator Franklin Templeton's goal of under 15%.

The municipality of Reşiţa listed the first green bonds on the Bucharest Stock Exchange, worth 8.8 million euros.

The bonds had been sold through a private placement, with the proceeds to be used to improve transportation in the city. Last month, the first issue of Fidelis government bonds, worth a total of 1.8 billion lei or 360.3 million euros, debuted at the BVB.