Slight increases for indices in the first month of the year

The main indices of the Bucharest Stock Exchange (BVB) had slight increases in the first month of the year, during a period of moderate appreciation in the international markets.

The BET index, of our market's twenty most liquid stocks, rose 0.92% to 15,512 points, while the BET-BK index, the performance benchmark for equity investment funds, advanced 2 .06%, up to 2,947 points.

• Jerome Powell also tempered market expectations for a Fed rate cut in the near future

In the United States, the Federal Reserve left interest rates unchanged and Chairman Jerome Powell also tempered market expectations for a rate cut in the near future.

"We want to have more confidence that inflation is moving toward 2% (aka the Fed's long-term target)," Powell said in an interview broadcast by CBS in early February, echoing the idea from the conference call following the Federal Reserve meeting. since the end of January. "I don't think that level of confidence will be reached until the March meeting, which is seven weeks away," added the Fed president.

Some of the companies published their results for the last half of last year, and according to a statistic published by Reuters at the end of last week, which takes LSEG data, about 80% of the issuers had exceeded the estimates at that time. In this context, the S&P 500 index rose by 1.7% last month, while the Nasdaq Composite, of companies active in knowledge-intensive fields, had an advance of 1.02%.

On our side of the Atlantic, where the European Central Bank kept interest rates at an all-time high, the Stoxx 600 rose 1.4%, while in Frankfurt the DAX40 gained 0.9%.

• Aquila, TeraPlast and TTS - among the performers in BET

At the Bucharest Stock Exchange (BVB), the shares of the distribution and logistics company for the consumer goods market Aquila - plus 12.5%, the titles of the manufacturer of construction materials TeraPlast - plus 12.04% and the shares of the ship carrier and the port operator Transport Trade Services - up 8.15%, had the best performance in BET last month.

Aquila announced a preliminary agreement on the acquisition of Parmafood, which will allow it to expand its presence in all distribution channels with products complementary to its business, according to a company report. Also, a series of valuation reports indicating price targets for AQ securities significantly above current quotes likely supported the stock's performance.

TeraPlast is coming off a year of share price declines, but third-quarter results were significantly improved and the company announced in early February an agreement to acquire Austria's Wolfgang Freiler Group. The volumes on which the increase in the TRP share price appeared suggest the presence of institutional investors in the market.

In the case of TTS, the share price continued the upward trend of last year, with Pilon II Metropolitan Life pension fund among the buyers. Transport Trade Services benefits from the reconfiguration of logistics chains at the regional level, in the context of the war in Ukraine, and for 2023 a large increase in profitability is taking shape.

Shares in Purcari Wineries rose 7.7 percent as the winemaker announced expansion into Turkey, while telecom operator Digi Communications rose 3.9 percent.

• Energy producers expect profitability to decline this year

Energy and utility companies have mostly released their Income and Expenditure Budgets for this year, and estimates are for declining profitability. Hidroelectrica shares fell 2.5%, likely under the impact of lower target prices given by some analysts covering the company, according to a Tradeville analysis report. For this year, Hidro estimates a net profit of 4.84 billion lei, 20% below the preliminary one from last year, of around six billion lei, according to the BVC. Nuclearelectrica's shares have stagnated, with the company estimating a 48% decrease in profit for this year.

In a month where oil prices rose slightly, OMV Petrom shares rose 1%. The company reported a profit down 61% last year and is proposing to investors a dividend with a yield of around 7% and possibly a special dividend. Romgaz shares rose by 2.2%, the company estimating that it will pay a dividend with a yield of 8.7%, compared to the average price of the securities last year.

Shares of high dividend-paying crude oil carrier Conpet advanced 2.7% last month, while gas carrier Transgaz gained 1.5%.

• BRD wants to allocate 60% of last year's profit to shareholders

Banking shares had different developments, mainly due to the ex-dividend correction of BRD securities, a company that distributed a dividend from the carried-over result for 2022. For this year, the credit institution reported a preliminary profit increasing by 27%, from which wants to allocate 60% to shareholders.

Banca Transilvania securities appreciated by 2.5% last month, including on the basis of share buybacks. The banking sector is set for a good evolution this year, given that interest rates will continue to provide a solid source of earnings.

• Compa has stopped the division process

The management of Compa Sibiu decided to interrupt the division process, which wanted to transfer almost half of the company's assets to another unlisted company, with activities in the real estate field, following clarification requests from some shareholders.

For the shareholders who would have withdrawn from the company, the valuer Value Management Consult had set a price of 0.6001 lei per share, 74% below the book value per share. The evaluation report has not been published.

• Trading discounts between 69% for Infinity Capital Investments and 49% in the case of SIF Muntenia

The BET-FI index, of SIFs plus Fondul Proprietatea, fell by 1.81% last month, the only basket of shares from BVB that depreciated in January. At the end of the month, the SIFs traded at discounts between the price and the Net Asset Unit Value (VUAN) located between 69% for Infinity Capital Investments, while the SIF Muntenia securities had a relative difference to the net asset level of 49 %.

In the case of FP, the discount was 20%, slightly above administrator Franklin Templeton's goal of under 15%. In mid-January, bonds of the Cluj County Council, worth 76 million euros, were listed on the Bucharest Stock Exchange. The bonds were sold in December of last year, through a private placement, the main buyers being banks, but also investment funds and pension funds. The bonds, with a nominal unit value of 100 euros, have a maturity of ten years, with maturity in 2033 and an early repayment option in 2029. The interest is 3.25% plus EURIBOR at six months.

The funds raised as a result of the placement are intended for the refinancing of the local public debt and the co-financing of some investment objectives of local public interest of the Cluj County Council.