Slight increases for BVB indices, in a tense climate

The Bucharest Stock Exchange (BVB) indices recorded slight increases in the first quarter of the year, in a climate marked by geopolitical tension in Europe and political uncertainty in our country, where presidential elections are due to take place in May, elements that put companies' reports for the fourth quarter of last year and, in some cases, dividend proposals in the background.

The BET index, of the twenty most liquid stocks on the BVB, advanced 4.74%, to 17,513 points, while the BET-BK index, the benchmark for the performance of equity investment funds, appreciated by 3.63%, to 3,254 points.

• European stocks outperform US stocks

Donald Trump has begun his second term as US president in the style of an imperial leader in international relations. He has imposed tariffs at an accelerated pace on almost every country in the world, later easing and postponing the implementation of some measures. His moves have raised concerns about inflationary pressures and stifling economic growth, even raising the specter of a recession in the US. In addition, Trump seems to have become closer to Russian President Vladimir Putin and is gradually distancing himself from Europe and even NATO, so that the architecture of the European security structure seems to be at the beginning of a process of reconfiguration.

In this context, the S&P 500 index has depreciated by 4.6% in the first three months of the year, while the Dow Jones has fallen by 1.3%. The Nasdaq Composite, a gauge of companies in knowledge-intensive sectors that are more sensitive to economic cycles, fell 10.4% as the Federal Reserve left interest rates unchanged.

On our side of the Atlantic, stock markets fared better than those in the United States, largely driven by expectations of massive defense and infrastructure investments. The pan-European Stoxx 600 index rose 5.2%, while London's FTSE100 index rose 5%. Frankfurt's DAX index rose 11.3% as the European Central Bank cut its benchmark interest rate twice.

• Dividends with yields of around 6% for Hidroelectrica, OMV Petrom and Nuclearelectrica shares

On the Bucharest Stock Exchange, Transgaz Mediaş shares registered a 25.8% increase in the first quarter of the year, the best performance in the BET index. The natural gas carrier's shares had a sharp growth spurt in the first part of February, without any clear elements to justify the evolution. Last year, the company obtained the highest profit in the last six years, but the reporting was done after the upward episode, so the results do not explain the growth spurt. Transgaz management proposed allocating half of last year's profit in the form of dividends, an amount equivalent to a net yield of 3.3%, compared to the share price at the end of March.

Shares of natural gas producer Romgaz appreciated by 16.7% in the first quarter of the year, in a context marked by the increase in gas prices in the first month and a half of 2025. The company reported a large increase in profit for the fourth quarter of last year and, together with OMV Petrom, announced the start of drilling the first natural gas exploitation well in the Black Sea, with production estimated for 2027. OMV Petrom shares advanced by only 4.2%, after starting with the second half of February the share price began to decline severely, in an international context that was starting to become increasingly murky, with an impact on the price of oil. The oil and gas producer will distribute a dividend to shareholders with a yield of 5.4%, compared to the end-March price, with the possibility of an additional allocation.

Shares of electricity carrier Transelectrica appreciated by 13.7% in the first quarter of the year, the increase being recorded before the publication of excellent financial results for the last quarter of last year, respectively for the whole year 2024, the company reaching a new maximum of annual net profit. The issuer's management proposed the allocation of half of the distributable result as dividends, equivalent to a yield of 4.4%, but the state requested an allocation of 90% of the profit. Electrica shares depreciated by 2.7% in the first three months of the current year, the dividend proposed by the management of the energy supplier and distributor having a yield of 1.2%.

Shares of electricity producer and supplier Hidroelectrica have developed a sideways movement in the first three months of the year, during which the company reported a 50% drop in profitability in the fourth quarter of 2024, but proposed that almost all of last year's profit be allocated in the form of dividends, equivalent to a yield of 6.6%. Nuclearelectrica, a company whose shares depreciated by 4.6% in the first quarter of the year, will distribute a dividend to shareholders with a yield of 6.1%.

Overall, the BET-NG index, of energy and utility companies, had an advance of 5.6%, the best evolution among the baskets of shares of our stock exchange, in the first three months of the year.

• BRD grants half of profit as dividends; cash and free shares at Banca Transilvania

Banking stocks have underperformed the European sector, as the Euro Stoxx Banks index rose 27.5% in the first three months of this year, driven by the prospects of massive infrastructure and armament spending. The management of BRD-Groupe Societe Generale will allocate 50% of last year's profit in the form of dividends, equivalent to a yield of 5.1%, while the board of Banca Transilvania has proposed a dividend with a yield of 5.4% and an increase in the institution's capital, an operation that involves the allocation of free shares, with an investor receiving 189 new shares for every 1,000 shares held, if the proposal is approved by shareholders.

• Aquila and MedLife up 10%

Aquila shares appreciated 19.9% in the first quarter, also with a surge in the second half of February, amid higher-than-usual volumes, suggesting the presence of institutional investors buying. The company is also on the radar of Pilon II pension funds, with Metropolitan reporting at the end of March that it had exceeded the 5% ownership threshold in the consumer goods distributor.

Shares of private healthcare provider MedLife, a company that has a growth strategy through acquisitions, rose 10.2% in the first quarter of the year, while shares of telecommunications operator Digi Communications appreciated 3.4%.

• TTS, TeraPlast and One - among the biggest decliners in BET

Shares of Danube freight carrier Transport Trade Services fell by 15.4% in the first three months of the year, continuing the downward trend that began last year, amid the erosion of the company's financial results, which actually represents a normalization after two exceptional years.

Shares of construction materials producer TeraPlast fell by 15%, as the company deepened its loss related to the last quarter of the year and recorded its first negative annual result in 2024 since 2012. Shares of One United Properties fell by 14.4%, with the real estate developer reporting a decrease in both the profit for the last quarter of 2024 and for the full year, while the general macroeconomic and domestic political context may affect the activity of the sector and the company.

• 20% increase for Fondul Proprietatea shares

The BET-FI index, of former SIFs plus Fondul Proprietatea, fell by 2.2%, to 60,649 points, as the prices of the securities of all five former financial investment companies depreciated.

FP shares appreciated by 20.2%, an evolution that shows, on the one hand, that the selling pressure exerted by pension funds last year has faded. On the other hand, the fund is running a buyback program that supports the share price and has proposed distributing dividends with a yield of almost 10%, the highest among the main companies on the BVB. The former SIFs have fallen off the radar of pension funds and other institutional investors, they have no active retail investors, and the Lion Capital group, Longshield Investments Group and Infinity Capital Investments do not distribute dividends.

At the end of March, the former SIFs were trading at discounts between price and Net Asset Value (NAV) ranging from 71% for Lion Capital to 46% for Longshield Investment. For FP, the discount was 44%, above the administrator Franklin Templeton's target of under 15%.

• InterCapital Asset Management has listed an ETF on the BVB that tracks the main Slovenian market index

The Ministry of Finance has started to issue Fidelis government bonds to the public on a monthly basis, starting this year. The total amount raised in the first quarter of 2025 through two such issues amounts to 6.5 billion lei, with subscriptions in February of 4.3 billion lei, a historical record.

The investment manager InterCapital Asset Management from Croatia has listed an ETF on the BVB that tracks the main Slovenian capital market index, which reflects the evolution of the nine most traded companies on the Ljubljana Stock Exchange, the basket of shares being adjusted by reinvesting the gross dividends paid by them.

Green Tech International, a group that operates geothermal wells and a platform for geothermal energy solutions, debuted on the BVB last month, after an IPO carried out in December last year. In the bond area, Autonom Services listed a new debt issue, worth 30 million euros.

Norofert, OMRO IFN, Mikro Kapital and Stanley Capital listed, in the first quarter of the third, bonds worth seven million lei, 1.56 million euros, two million euros and 14.8 million euros, on the BVB Multilateral Trading System.

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