The expanded blue chip BET-XT index of the 25 most liquid stocks fell 10.71%, while the BET-BK return on investment funds recorded a depreciation of 8.96%.
The total value of exchanges realized on Wednesday on the Bucharest Stock Exchange stood at almost 1,056 billion lei (226.75 million euros), most of them stock transactions (1.053 billion lei).
The largest declines were recorded at Banca Transilvania (-19.91%), BRD-GSG (-16.62%) and TMK Artrom (-15%). Increases were Amonil (plus 3.85%) and Electromagnetic (plus 2.05%). The highest value of transactions was recorded for Banca Transilvania, ROL 169.8 million, BRD-GSG, ROL 54,485 million and OMV Petrom for ROL 32,456 million.
BSE representatives have reported in a press release that the local capital market has entered an area that could jeopardize prospects for future development, including a possible promotion of the stock market to emerging market status.
"The Bucharest Stock Exchange (BVB) has taken note of the negative effects reflected in important stock market indices as a result of the recently announced Government Emergency Ordinance (GEO). The local capital market, which employs Romanian companies that account for more than 10% of Romania's Gross Domestic Product, has entered an area that may endanger prospects for future development, including a possible promotion of the scholarship emerging market. Investors are paying special attention to the actions of political decision makers that influence the economic environment and the evolution of the listed companies, a major aspect of the investment process being given by the predictability and legislative stability", reads the statement.
Reuters reports that Romania's stock market fell 12% on Wednesday, heading for the worst ever day after the government announced plans to shrink banking assets and caps the price of gas.
"The decision immediately canceled what had been one of the best performing European markets of the year and caused difficulties in Austria, where banks such as Erste and Raiffeisen, which operate in Romania, have seen significant declines," according to Reuters.
One of the most important measures announced by the Minister of Finance, Eugen Teodorovici, is aimed at a "levy on greed" that will apply from 1 January 2019 to financial-banking institutions, if the ROBOR rates at 3 and 6 months exceed The authorities estimate the impact of this measure to three billion lei.
There is also a gas capping plan, a charge on the turnover of energy and telecoms companies and changes to the Pension Pillar 2.
According to Reuters, following the 12% decline, the Bucharest Stock Exchange's main index is heading for the worst ever day recorded in January 2009, making it a year hard for the European markets to look even worse The center, where only Bucharest records visible growth, before the significant decrease on Wednesday.
Morgan Stanley analysts argue that the tax on banks implies a reduction in total profits of more than 50%. Although other Central and Eastern European countries have introduced bank charges in recent years, none has been linked to interbank rates.
"Linking a banking fee to ROBOR's evolution is an unprecedented measure and could undermine the central bank's control over its monetary policy," BCR considers.
In Austria, Erste Bank titles, which generate 8.4% of revenues from the Romanian Commercial Bank subsidiary, dropped by 10%, the largest decline registered by a stock of the STOXX 600 index, while Raiffeisen Bank International, which has about 6% of its assets in Romania, registered a decrease of 3.8%.
And in Prague, the Bursa recorded a 2.2% rebound, the lowest in July 2017, and Erste shares listed in the Czech Republic fell by 8%. The Budapest Stock Exchange's main index was also on the red.
AGERPRES/(AS - editor: Nicoleta Gherasi, editor online: Simona Arustei)