New historical records for the main indices of BVB in May

The main indexes of the Bucharest Stock Exchange (BVB) ticked new historical records last month, when companies published their results for the first quarter of the year, and international markets had a growth trajectory.

The BET index, of the twenty most liquid securities of our market, appreciated by 3.1%, to 17,588 points, while for the BET-TR index, which also includes the dividends paid by the companies included in the main basket of shares of at BVB, the increase was 5.5%, up to 37,363 points. The BET-BK index, the yield benchmark for equity investment funds, rose 3.6% to 3,251 points.

• Traders cut their expectations for a Fed rate cut in September, according to the CME FedWatch Tool

In the United States, the markets defied the saying "Sell in May and go away" or "Sell in May and go on vacation", with indices ending last month with significant appreciations. The S&P gained 4.8%, while the Nasdaq Composite index, of companies active in knowledge-intensive fields, appreciated by 6.9%.

Expectations about the impact of artificial intelligence are among the factors supporting stock prices, while inflation is falling but not enough for the Federal Reserve to start cutting interest rates in the near future, according to international media.

Late last week, futures traders were giving a 55% chance the Fed would cut interest rates by 25 basis points at its September meeting, down from a 65% estimate two weeks ago, according to the CME FedWatch Tool.

On our side of the Atlantic, the pan-European Stoxx 600 rose 2.6% last month, while Frankfurt's DAX40 was up 3.1% ahead of this week's European Central Bank meeting, which the first interest rate cut is expected.

• MedLife, Digi and Transgaz - the best developments in BET

At the Bucharest Stock Exchange, the BET-XT index, of the thirty most liquid shares of our market, had an advance of 2.6%, to 1,492 points, while including dividends the increase was 5% , up to 3,134 points, as shown by the evolution of the BET-XT-TR index.

The increases also appear in the context in which, starting from the second part of March, the Pillar II pension funds began to receive transfers increased to 4.75% of the monthly gross income of employees in our country, so that they have more money to invest.

Shares of private healthcare provider MedLife climbed 23.5% last month, the best performer in the BET, on heavy volume, pointing to buying by institutional investors. The issuer reported growing business for the first quarter of the year, while the consolidated net profit rose by 55%, and on an individual level the company moved into profitability, with a net result of 4.1 million lei against a loss of 3.8 million lei, in the first three months of last year. Margins have also improved, reflecting the streamlining of the company's business.

The shares of the telecommunications operator Digi Communications appreciated by 19.2%, last month, to a new historical record, as Morgan Stanley announced the inclusion of the company's shares in benchmark indices dedicated to frontier markets. The company is preparing the launch of its services in Belgium, which will be operational this summer itself, it acquired the mobile operator Telekom Romania and announced a more than double increase in profit in the first three months of the year, which is true from a reduced base.

The shares of the natural gas carrier Transgaz rose by 18.9% last month, especially on the background of the company's reporting of a doubling of profitability in the first quarter of the year, up to 263 million lei. In the last days of the month, the international rating agency Fitch confirmed the "BBB-' rating of Transgaz, with a stable outlook.

• Divergent developments for the main banks on our exchange

In a month in which the Euro Stoxx Banks index had a slight increase of around 4%, the evolution of the two main banking shares on the BSE was divergent. The shares of Banca Transilvania rose by 9.9%, to a new historical record, as the credit institution reported for the first three months of the year a profit increasing by 35% and is going to grant dividends and free shares. In contrast, BRD-Groupe Societe Generale securities depreciated by 8.65%, following an ex-dividend correction and probably the fact that the credit institution recorded a slight decrease in profitability in the first quarter of the year.

At the end of last month, the Banca Transilvania Group reached an agreement regarding the acquisition of BRD Pensii, administrator of Pillar II and Pillar III funds. Also, BRD Finance IFN, the consumer credit division of BRD, is in the process of selling the credit portfolio in our country. According to news published in the press in February, Societe Generale is exploring the possibility of selling BRD, information that has not been confirmed but not denied by the management of the credit institution.

• 1.8% increase for BET-NG, below the appreciation of most BSE indices

Hidroelectrica's shares had a slight decline in May, in the conditions in which the company rectified its income and expenses budget for this year, as a result of the cheaper energy price and the increase of some expenses. Thus, Hidroelectrica estimates a profit of 4.1 billion lei in 2024, 14% below the initially budgeted one, as well as dividends of 3.7 billion lei, also decreasing.

For the first three months of the year, the energy producer and supplier reported revenues down 22%, mainly on the back of lower sales prices, and a net profit of 1.3 billion lei, 23% below that of the first quarter of the year last.

Nuclearelectrica shares depreciated by 6.1% last month on the back of the ex-dividend correction and as the company reported a 26% drop in profit for the first three months of the year, mainly as a result of the price drop energy in the free market. OMV Petrom shares recovered the ex-dividend correction from May 14 and ended the month with an advance of 1.66%.

Transelectrica shares appreciated by 11.9%, while the company's profit increased by 29% in the first quarter of the year. In addition, the energy carrier signed a memorandum with three energy companies from Azerbaijan, Georgia and Hungary for the implementation of the "Green Energy Corridor" project, a project in accordance with the energy transition objectives of the European Union, according to the company's statement.

As a whole, the BET-NG index, of energy and utility companies, had an advance of 1.8% last month, below the evolution of the BVB's general indices.

• Trading discounts between 72% for Infinity Capital Investments and 53% in the case of SIF Muntenia

The BET-FI index, of the former SIFs plus Fondul Proprietatea, had a decline of 2.3%, up to 58,932 points, being the only basket of shares from BVB that depreciated last month. The decrease was mainly due to the 10.4% drop in Fondul Proprietatea shares, based on the ex-dividend correction related to FP's last cash distribution.

Infinity Capital ended up with 20% of Lion Capital, after acquiring a stake of almost 5% from the Active Plus fund, managed by Swiss Capital, but financed almost entirely by Lion and SIF Muntenia. Active Plus is one of the funds complained by investors as fronts for the ownership and indirect use of own shares by the management of Lion Capital.

At the end of the month, the SIFs traded at discounts between the price and the Net Asset Unit Value (VUAN) between 72% for Infinity Capital Investments and 53% in the case of SIF Muntenia. For FP, the discount was 23%, above administrator Franklin Templeton's goal of under 15%.

• Cyber-security company Fort has been listed on the AeRO Market

Premier Energy, a company from the energy industry, debuted last month on the Main Market of BVB, following an initial public offering that attracted 695 million lei - the largest IPO of a private company in the last five years. The company sold 35.94 million shares, a quantity that also includes the 4.68 million over-allocated shares for stabilization, at the price of 19.5 lei. 80% of the offering was intended for institutional and 20% for retail investors, who received 125 Premier shares per 1,000 subscribed.

InterCapital Asset Management has listed the first ETF (Exchange Traded Fund) from the Bucharest Stock Exchange that tracks the performance of the BET-TRN index, the total net return variant of the BET index, which reflects both the price evolution of the most important Romanian companies listed on the stock exchange, and and the reinvestment of the net dividends offered by them.

The cyber security company Fort (4RT), part of the Bittnet Group, was listed on the AeRO Market, following a capital increase and a private placement in which the company attracted 1.67 million lei.

On May 28, fuel distributor JT Grup Oil's offer began, through which the company intends to sell a maximum of ten million new shares, at a price of 6.5 lei per share. By the end of the month, investors had subscribed to a third of the securities offered for sale.

We have entered the month of June, in which a good part of the companies will pay dividends to shareholders, part of the money to be reinvested, probably, also in securities listed on the Bucharest Stock Exchange.