Historical records for BET; why are investors betting on BVB?

The BET index, which reflects the evolution of the twenty most liquid securities listed on the Bucharest Stock Exchange (BVB), has registered an increase of about 18% since the end of the presidential elections in May, thus exceeding the dynamics of many international markets, and during this month it reached several historical records, being one step away from reaching the 20,000 point threshold.

The clarification of the political context and the adoption by the government of the first package of fiscal measures, aimed at correcting the budget deficit and reducing the perception of risk associated with our country, contributed to the improvement of investor sentiment. In addition, the difference in performance compared to other markets, considered probably unjustified by investors, as well as certain corporate events with a significant impact on the share price of some important issuers on the BET, catalyzed the appreciation of the index, according to specialists consulted by Ziarul Bursa.

• Alin Brendea: "The risk associated with Romania tends to decrease, which is best captured by the government securities market"

Alin Brendea, stock analyst at Prime Transaction, says: "Market sentiment was strongly positively influenced by the encouraging reaction of rating agencies and the European Commission regarding the fiscal adjustment program".

The government has adopted a large fiscal package to reduce the budget deficit, combining tax increases (VAT, excise duties, CASS applied to pensions above a certain threshold, tax on dividends and bank turnover), freezing of some public expenditures (salaries, pensions, allowances), restructuring of state-owned companies and the administration, as well as measures to digitize ANAF and combat tax evasion.

Prime analyst points out that the Moody's rating agency considers the Government's fiscal measures positive and estimates a deficit of 7.8% of GDP in 2025 and 6.1% in 2026, under the condition of full implementation. "The agency warns of execution risks and emphasizes that compliance with targets and the implementation of the PNRR are essential for fiscal stability and maintaining the rating,” Alin Brendea wrote in an analysis report published on the brokerage company's website.

On the other hand, the European Commission considers Romania's recent fiscal measures to be a positive step towards correcting the deficit, but calls for full and rapid implementation, Brendea added, adding: "By October 15, Romania must adopt additional reforms and a new fiscal reform to avoid sanctions. Mid-October thus becomes the time for a final assessment of Romania's efforts to responsibly combat the growing imbalances in the economy”.

• "The stock market appreciation in the last two months came with a decrease in government bond yields, as they became attractive again for international investors,” according to Prime analyst

The risk associated with Romania tends to decrease, which is best captured by the Romanian government bond market, points out Prime Transaction analyst. "The negative developments in the economy over the past year have pushed up government bond yields to the highs of recent years. In the last two months, the stock market appreciation came with a decrease in these yields, as Romanian government bonds became attractive again for international investors. It is an encouraging development, the trend of which certainly helps stock market developments. It indicates a growing appetite for Romanian financial assets and a return of confidence towards Romania,” wrote Alin Brendea.

The Prime analyst also points out that, currently, the yield curve indicates the market's expectation that, in the long term, the yields on Romanian securities will decrease - practically the interest rates requested for a two-year or ten-year loan are identical - proof of the confidence that investors show in the chances of an improvement in the Romanian economic picture in the medium and long term.

• Irina Răilean: "Transgaz has had a solid evolution from a fundamental point of view, recently"

Irina Răilean, CFA, founder of Mosaiq8 - a fundamental analysis platform for companies listed on the BVB - highlights the evolution of the main shares of the issuers included in the BET index, since the beginning of the month.

"The movement of the index is nothing more than the movement of all the shares that compose it, proportional to their importance," says the financial analyst, adding: "The first four companies in BET - Banca Transilvania, OMV Petrom, Hidroelectrica and Romgaz - hold 63% of the index. Since the beginning of the month, BET has risen by about 4%, thanks to the positive evolution of Banca Transilvania (20% weight in the index), which rose by 5%, of Romgaz (10% weight), which advanced by about 5%, and of Transgaz, which, although it has a relatively small weight (4.88%), marked an advance of about 20% of the share price. At the same time, the advance of OMV Petrom and Hidroelectrica was more modest, around 1%".

• "The perception that free shares bring additional earnings is distorted; the real appreciation of a company's value comes from its fundamentals," says the CFA analyst

According to the founder of Mosaiq8, the factor that caused a significant jump in Banca Transilvania shares was the distribution of free shares on July 17, when the price rose by 4.2%. "About 90% of the share price increase from July 1 to July 22 is due to the distribution of free shares. Translating these figures to the index level, about 20% of the BET index's performance, of 4.35% between July 1 and 22, is attributed to the distribution of free shares by Banca Transilvania. As a fundamental analyst, I can say that the distribution of free shares is an accounting operation that some issuers choose to do, but which does not change the total value of the company, nor does the ownership of shareholders become more valuable (we just have more shares in the portfolio, not more expensive ones). The perception that free shares (taken separately) bring additional earnings is distorted. The real appreciation of a company's value comes from its fundamentals, the increase in the size of the business, margins and operational indicators", Irina Răilean told us.

Another determining factor in the positive movement of the BET index also came from Transgaz, added the CFA analyst. "The 20% increase since July 1 in the share price, with a weight of only 4.88% in BET, generated 23% of the index's advance. In recent times, Transgaz has had, from a fundamental point of view, a solid evolution: the applicable regulated income since October has increased, the company is advancing with infrastructure projects (Tuzla-Podişor has been completed), and Fitch has improved the rating outlook from "neutral" to "positive". All of this has put Transgaz's share in a favorable light," says the founder of Mosaiq8.

According to the CFA analyst, another important contribution to the BET index's advance also came from Romgaz, a company that in the last three weeks has advanced with the takeover process of Azomureş (which has restarted one of the installations in the meantime) and has selected the consultant who will analyze Azomureş in detail, before a possible acquisition. "At the same time, Romgaz announced multiple bank deposits, which indicates the existence of liquidity reserves within the company. Romgaz shares have increased by 5% since the beginning of the month, and this increase contributed 12% to the index's evolution," added Irina Răilean.

• Andrei Sota: "The performance of the BET index is approaching that of other international markets, although we still lag behind them if we look at the evolution of the last year"

Andrei Sota, founder of the financial research platform Signal Sigma, puts the evolution of the BET index in perspective of the last year, comparing it with the dynamics of developed and emerging markets.

"The first event that led to a serious decoupling from non-US stock markets (ed. developed outside the United States) was the outcome of the first round of the presidential elections in December 2024. Then, the BET index collapsed, and its evolution was less correlated with other markets in the period of political uncertainty that followed. When, finally, more clarity emerged - the end of the elections and the victory of Nicuşor Dan - the BET index had already lagged far behind other markets that were at historical highs. During the period December 2024 - May 2025, there was also the international context of the tariffs proposed by Donald Trump. This led to a "Sell America Trade", which favored the appreciation of the euro and the growth of non-US markets", Andrei Sota told us.

The founder of Signal Sigma pointed out that, on May 19, after the political situation in our country had become clearer, foreign non-US stock markets had increased by 10% compared to the session on July 22 of last year, while the BET index recorded a decrease of 4%. "Investors - including international ones - certainly considered that this differential was no longer justified and arbitrated the gap in the period that followed", said Andrei Sota.

Later, at the end of June, the MSCI agency recognized the Romanian capital market as an Advanced Frontier Market, a classification that brings us one step closer to the status of an Emerging Market, which certainly acted as an advantage, says the founder of Signal Sigma, adding: "Finally, on July 14, the opposition's motion of censure failed, and the package of austerity measures proposed by the Bologna government was to be applied. This was the final reason for the growth that now brings the BET index closer to the performance of other international markets - although we are still behind them, looking at the last year."

• Andrei Sota: "The energy and utilities sector benefits from inelastic demand - essential for the population and industry - thus better resisting austerity policies”

Several sectors have recently stood out through the returns that come in response to fiscal austerity measures - the main relevant event in the local market, says Andrei Sota.

"The energy and utilities sector is one of the beneficiaries of the current context”, says the founder of Signal Sigma, noting the developments of Romgaz, Transgaz and Electrica. "The sector benefits from inelastic demand - essential for the population and industry - thus better resisting austerity policies. The recent increases could be linked to the perspective of EU investments in energy infrastructure”. The real estate sector has performed better than expected, says Andrei Sota, adding: "In the short term, the tax increase could negatively affect companies in the sector, but the prospect of foreign investment and housing demand have supported recent performance. We note One United Properties, Imotrust Arad and Impact Developer & Contractor".

The banking sector also had a positive evolution, with banks and asset managers taking advantage of the stabilization of the capital market and the attractive interest rates of government securities. "We note the evolution of Patria Bank, Lion Capital and Banca Transilvania, with an average growth of 12% in the last month", concluded Andrei Sota.