România with the lessons learnt from 2008 crisis

01/04/2020 / Comments Off on România with the lessons learnt from 2008 crisis

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The Romanian Investor Relations Association (ARIR) invited top specialists from the Romanian financial market to discuss the perspectives of the crisis recovery and the lessons learned. The first conclusions of the ARIR’s online event “Market Sentiment – March” – with the representatives of the National Bank of Romania, Bucharest Stock Exchange, Franklin Templeton, Bucharest Airports, OTP Asset Management and Rivel Research – confirms the soundness of the banking system and the opportunities of the crisis, in the context of the pandemic. The entire event is available HERE.

Daniela Șerban, President & Co-Founder ARIR:
At the macroeconomic level, we see the Government’s attempt to balance the lack of resources in the healthcare system with the budget deficit in order to propose solutions to support the economy. Salvation lies in liquidity – in bills paid and collected, allowing the continuation of the activity and the payment of salaries. Romanians, they also seem to have done their homework better, because they have accumulated money in the “piggy-bank” for over 50 billion euros and they are not as indebted as they were 10 years ago. With this money, can be bought twice all the companies listed on the Bucharest Stock Exchange, money that represents the equivalent of 20% of the country’s GDP.

Cristian Popa, Member of the Board, National Bank of Romania
Compared with a decade ago, the banking sector is much better prepared to tackle the current situation, it is well capitalized, the liquidity is quite good, and the indebtedness of the clients is much lower. We cut the interest rate. Also, the central bank will start an acquisition program of treasury bonds. We are ready to cut the minimum reserve rates if it will be needed, as a measure to increase more the liquidity in the market, so that the money flows into the system and in economy. We encourage the banks to use the liquidity facility at their disposal as we are here to provide liquidity and we took measures in this direction. Bank level liquidity ratio is over 100%, so the entire banking sector is functioning well.


Radu Hanga, President BoD, Bucharest Stock Exchange

The local economy is much more stable compared to previous crisis. The most visible improvement is in the leverage of the economy. There is less debt in the market and we saw the deposits in the banks going up in the last years, with around 10% per year. At the Bucharest Stock Exchange, we are focusing on operating as usual, of course with most of the people working from home. We have to provide what we committed ourselves to the investors and to the listed companies – to keep an open market and to provide liquidity to those who are willing to buy or to sell. Each crisis provides threats, but also opportunities. Even if it looks a difficult environment, there is also an opportunity to buy stocks at various local companies at discounts of 30-40% compared to what we had 1-2 months ago.


Claire Lavery, Rivel Research & IR Society

Over the past few weeks, we interviewed both the investment community and the global IROs to understand the impact of COVID-19. Companies went from seeing the corona virus “a minor” to “serious” threat, with 41% viewing it now as a “very serious” one and 51% as “a serious” threat to the global economy. From an investors’ communications perspective and what investors what to know, our perception study revealed that they want to understand the outlook and the financial impact of the virus, the liquidity and the strength of the balance sheet.

Wishing to give investors more clarity on the measures taken by listed companies and how are affected by the state of emergency, ARIR proposes a dedicated page on its website https://www.ir-romania.ro/covid-19/, gathering in one place information and news from listed companies regarding the measures implemented and the impact of COVID-19 on the business.