English
The price of EBS shares is now only one third of what it was at the time of floating
Shares of Austrian group "Erste Bank" (EBS), majority shareholder of the Romanian Commercial Bank (BCR), reached a new historic low during yesterday"s trading session, of 48,3 lei/share, after tumbling more than 15% on the Vienna Stock Market.
Gabriel Aldea, of "Intercapital Invest", considers that the big drop of "Erste Bank" shares comes on the heels of the record Q4 2008 losses posted a few days ago by some of the biggest American and European banks such as "Citibank", "Bank of America" or "RBS".
"On the other hand, today"s evolution of EBS (editor"s note: yesterday) was also influenced by the announcement concerning Erste"s acquisition of the stake in the investment fund division of
Paul Brendea, financial analyst at "Prime Transaction", considers that the drop of Erste"s shares was caused by the great losses posted by RBS, following the depreciation of its "ABN Amro" assets. The analyst says that this raises further doubts over the stability of other huge banking groups, which had pretty aggressive acquisition policies these last few years.
Mr. Brendea also said that "Erste Bank" itself had an aggressive acquisition policy, and, unlike "RBS", these acquisitions took place in the Eastern European area, whose rating was downgraded by rating agencies recently and for which outlook keeps getting gloomier.
"Technically, EBS yesterday violently "shattered" the 12.5 EUR/share level of support, where it had a
Mr. Cătinaş believes that the evolution of EBS shares will be tightly correlated with the evolution of the banking sector all over the world, who also said the BSE is experiencing additional volatility because of the EUR/RON exchange rate. "Let"s remember that in the autumn of 2008, Erste Bank admitted it had exposure of its own to toxic assets," Mr. Cătinaş concluded.
Mihai Chişu, a broker at "IFB Finwest", considers that the evolution of EBS"s shares on the BSE will always be influenced by their moves on the other exchanges where they are listed and where the traded volumes are truly relevant, and he outlined that this aspect of the domestic stock market can be seen in the market-makers" arbitrage operations.
"Just to get a clearer picture of the difference in value of EBS"s turnover on the Bucharest Stock Exchange compared to the Vienna Stock Exchange, we just have to look at the volume of shares traded until 14:00 today (editor"s note: yesterday): just 43.740 EBS shares in Bucharest, compared to 3.536.424 shares in Vienna", Mr. Chişu explained.
Răzvan Popescu, of "Vienna Investment", considers that the steeper drop was also fuelled by the European Commission"s unfavorable reports for Romania in 2009, where "Erste" has a significant exposure.
Rareş Şofariu, Development and Research Director at "KD-Capital Management", feels that the evolution of EBS on the Bucharest Stock Exchange, will depend first of all on its evolution on the Vienna Stock Exchange, which also depends on its Q4 2008 results as well as on the possibility that the Austrian government might continue to buy shares of "Erste Bank".
Considering the stream of bad news in the financial market in the last few days, following the period of financial statements for Q4 2008, and given that expectations are extremely pessimistic, brokers feel that EBS shares could continue its current downward trend, as investors" panic could lead to high price volatility.
Austrian group "Erste Group Bank" posted a net profit of 1,46 billion Euros for Q3 2008, up 74,6% YOY 2007. The bank"s assets grew by 4,4%, reaching 209,4 billion Euros.
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