ECONOMY

Romanian stocks rise, led by SIFs

BUCHAREST (SeeNews) – Romanian stocks extended their winning streak to eight days with new gains to set fresh record highs yesterday, with the country’s five geographically defined investment funds (SIFs) leading the charge, brokers said. «Part of the reason is that the Finance Ministry finally clarified that only gains made on stocks bought after January 1, 2006 will be taxed at 16 percent, and any previous profit at only 1 percent,» one broker told SeeNews. The ministry’s intention to tax all gains made after May 1 caused a slump on the Bucharest Stock Exchange this spring. The ministry later decided to postpone the tax rise. «Right now, most short-term investors are unwilling to sell yet and are, in fact, looking to expand their portfolios. The SIFs are by far the most liquid stocks, so they were sought most, but they have also performed well this year, which added to their appeal,» the broker added. BVB’s BET-FI index, which tracks only the five funds, closed at a fresh record high for a third straight day at 42,957.16 points, gaining 3.4 percent on the day and 148.5 percent so far this year. Although the SIFs dominated trading for a third consecutive day, blue chips also gained from increased investor attention and the BVB’s 10-share blue chip BET index finished 1.02 percent higher at a record 6,620.53 points. The index has gained 51.7 percent this year. The market’s BET-C composite index rose 1.06 percent to a close of 3,925.48 points, still short of the 4,108.74 points all-time high, set in February. The ROTX index of Romania’s seven most capitalized stocks, a joint index of the BVB and the Vienna Stock Exchange, ended 1.12 percent higher at 13,966.98 points. With bulls dominating trading, the turnover on the BVB remained high at 53.5 million lei (14.6 million euros), although it was lower than Monday’s four-week high of 57.6 million. Resurging interest in the BVB, however, pushed lower the turnover on the over-the-counter market Rasdaq, which was only 850,000 lei. Its composite index, Rasdaq-C, gained 0.25 percent to close at 1,765.47 points. The BVB and Rasdaq are expected to merge by the end of 2005.