The upward trend of the BVB indices took a break in April

The upward trend of the indices of the Bucharest Stock Exchange (BVB) started in the second part of last year entered a corrective phase, in April, during a period with declines in the main international stock markets.

The BET index, of the twenty most liquid stocks on the BSE, ended the month at 17,061 points, 0.21% above the level at the end of March, while the BET-NG index, of energy and utilities companies, it depreciated by 0.22%, up to 1,223 points.

• S&P 500 - at its biggest monthly rebound since last fall

In the United States, the S&P 500 fell 4.2 percent in April, its biggest monthly decline since last fall, while the Nasdaq Composite index of knowledge-intensive companies fell 4.4 %. The decline came mainly as the latest inflation data came in above expectations, reducing expectations for an interest rate cut by the Federal Reserve. For example, Bank of America now expects the Fed to cut rates just once this year, in December, compared to June as previously expected, according to CNBC.

Jerome Powell, the chairman of the Federal Reserve, said after the last monetary policy meeting that the bank's officials want to have "greater confidence" that inflation is falling to 2%, but it is not quite clear what that entails.

On the other hand, the Fed chairman pointed out that it is unlikely that the bank's next move will be an interest rate hike. The general view on Wall Street is that the long-term growth trajectory of the stock market will not be derailed by the adjustment of expectations for Fed actions or the tensions in the Middle East. Also, companies' financial results for the first quarter that had been published by the end of April were encouraging, with about 80% of issuers reporting performance above estimates, according to Edward Jones Investments.

In Europe, where the European Central Bank's first rate cut is expected in June, the STOXX 600 index fell 1.5% in April, while the DAX40 index in Frankfurt fell 3.1%.

• Sphera, Digi and MedLife - the best developments in the BET index

At the Bucharest Stock Exchange, the BET-XT index, of the thirty most liquid shares of our market, stagnated, in a month marked by the general meetings of the companies in which the shareholders voted on the dividend proposals and the Revenue and Expenditure Budgets for This year.

Shares in Sphera Franchise Group (SFG), the operator of KFC, Pizza Hut and Taco Bell, rose 15% last month, the best performer in the BET index. The management of the company announced that it intends to propose a new distribution of dividends to the shareholders, in the second half of the year, after the one approved at the end of last month. Thus, it is possible for Sphera to allocate this year a dividend of 2.1 lei per share, equivalent to a gross yield of 6.2% compared to the last share price in April. The company has budgeted for this year a profit increasing by 20%, and Erste EGroup maintained its Buy recommendation for SFG securities and raised the price target to 38.1 lei per share, 13% above the company's quotation of at the end of last month, according to our calculations based on the report published on the BVB Research Hub portal.

The shares of the telecommunications operator Digi appreciated by 12.4% in April, an evolution catalyzed by the announcement regarding the sale by Digi Spain of an optical fiber internet network for a price of up to 750 million euros. The company will invest the sums resulting from the transaction also in Spain, its second market after Romania, including to take over spectrum worth 120 million euros, according to reports from BVB.

Shares in private healthcare provider MedLife ( M ) rose 6.72% last month, rising after the group released its Income and Expenditure Budget for this year. Thus, MedLife estimates the increase in turnover and a net profit of 21.8 million lei, compared to a loss of almost 4.2 million lei last year.

• 2% increase for Banca Transilvania, while BRD shares fell by 4.1%

In a month in which the Euro Stoxx Banks index had a slight increase, the main banking shares on the BSE had different developments. The shares of Banca Transilvania (TLV) rose by 2.01%, while the shares of BRD-Groupe Societe Generale (BRD) depreciated by 4.15%, perhaps also in the context in which the expectations regarding the dividends allocated by BRD they reduced, following the request of the French from Societe Generale. Banca Transilvania will allocate a dividend with a gross yield of 4.4%, plus 148 new free shares per 1,000 shares held, while the dividend to be distributed by BRD is equivalent to a gross yield of 5.6%.

• High yielding dividends for energy companies

OMV Petrom (SNP) shares rose 2.6% last month amid tensions in the Middle East with possible impact on oil prices. The company will distribute a dividend with a yield of 6% and announced its intention to propose an additional dividend, budgeted an increasing profit for this year and started the project of a photovoltaic park of 710 MW, construction estimated at 400 million euros, according to Economica.net.

For the first quarter, the oil and gas producer reported net profit down 6% compared to the same period last year.

Nuclearelectrica will allocate a dividend with a yield of 7.5%, Conpet a dividend with a yield of 7.6%, while the distribution of Transelectrica equates to a yield of almost 1%. Romgaz shares declined by 6.4% last month, as the company's management recommended a dividend distribution of only 20% of last year's profit, which was also approved. Thus, Romgaz will allocate a dividend with a yield of 2.7%, according to our estimates that take into account the increased capital of the company on the date of registration.

In terms of declines, One United Properties titles are worth noting, which depreciated by 9.07% last month. The decline appeared, initially, in the context of the sale by the founders of the company of a significant package of shares through an accelerated placement, at a price 11.9% below the reference in the "regular" market, which probably led to sales and from other investors.

• Lion Capital's AGM rejected the dividends requested by Blue Capital; AISIF accuses Lion management of using company money exclusively for their own benefit

The BET-FI index, of SIFs plus Fondul Proprietatea, had a decline of 0.72%, up to 60,331 points, last month, as FP shares lost their importance after the sale of Hidroelectrica, and the group Lion Capital, SIF Muntenia and Infinity Capital Investments do not distribute dividends. In addition, the most important investors from BVB, the Pilon II pension funds, do not own or purchase shares of the three former SIFs.

Fondul Proprietatea will allocate a dividend with a yield of 11.6%, after the shareholders' vote at the end of last month. Instead, Lion Capital's AGM rejected Blue Capital's request to allocate dividends and to carry out own share buyback programs that would later be cancelled, so that the trading discount would be reduced and the profit per share would increase. The Association of Investors in SIFs (AISIF) claims that this situation arises because Lion's management uses the company's money to, through intermediaries, control the decisions of the shareholders' meeting, exclusively in their own interest.

At the end of the month, the SIFs traded at discounts between the price and the Net Asset Unit Value (NVA) between 72% for Infinity Capital Investments and 52% in the case of SIF Muntenia. For FP, the discount was 21%, slightly above administrator Franklin Templeton's goal of under 15%.

In April, the Ministry of Finance listed the last issue of Fidelis government bonds through which it collected 3.2 billion lei from the population, the highest value since the launch of the program.

Also last month, the private vertically integrated energy infrastructure company Premier Energy announced its intention to launch a public offering, which started on May 8, followed by the listing on the BSE. The market operation consists of two offers, namely a primary one for a maximum of 25 million new shares, a quantity that can be supplemented up to 30 million shares, and a secondary offer in which the shareholder EMMA Alpha Holding wants to sell 6.25 million shares, amount that can be increased up to 7.5 million shares. There was also an over-allotment option, where EMMA Alpha Holding can sell a maximum of 4.68 million more shares.

Investors can subscribe in the price range of 19 - 21.5 lei per share, until May 15. Retail investors can place purchase orders only at the maximum price, while institutional investors can subscribe at any price within the set range, in steps of 0.01 lei per share.

Also, JT Grup Oil, a company active on the fuel distribution market, announced its intention to launch a public offer, followed by listing on the AeRO Market.