BRD full year 2011 results and comments

Here is the link with the presentation (they don't believe in the foreign investor so this is in Romanian): http://www.bvb.ro/infocont/infocont12/BRD140212A.pdf


They've made a total of 465 Mil RON Net Profit for the full year 2011.
Right now the share price of BRD costs 11,25 RON which makes BRD having a PER (Price to Earnings Ratio) of 17,09. This means that if you would pay 11,25 RON for one share of BRD and BRD will distribute all their Net Profit as dividends, you will have to wait 17 years to make the 11,25 RON that you've paid for one share.
And this PER you compare it with other companies from this sector:

• Barclays PLC - listed at London Stock Exchange has a PER of 9,87
• Societe Generale (the mother company) - listed at Paris Stock Exchange has a PER of 6,96
• Raiffeisen Bank - listed at Vienna Stock Exchange has a PER of 6,03
• Banco Santander - listed at Madrid Stock Exchange has a PER of 7,99
• ING Groep - listed at Amsterdam Stock Exchange has a PER of 6,80

Of course BRD won't distribute their whole Net Profit as dividends, usually they distribute around 30 to 40%, which will make this price even more expensive. But this is the fundamental of the BRD, let's have a look at the price chart (this is a weekly chart, which means that one bar on the chart represents one week):

As you can see the price swings from 16 to 10 and back starting April 2010. The RSI (Relative Strength Index - which shows overbought or oversold conditions of a security) went oversold and then came back to neutral, which is typically of bear markets. 

Conclusion: If the international context becomes increasingly worrying, than I assume the price of BRD will break to the downside this lateral movement on the way to retest the lows around 4 RON. But if the international markets will stay up and moving higher I think the market participants won't look at the fundamentals and will push the price higher to reach again the 16 RON and probably break it to the upside to reach 22 RON.

Happy trading everybody!

SIF Oltenia (SIF5) Happy days may come to an end

As you can see from the chart SIF Oltenia (SIF5) price is hitting the most important downtrend line. All this impresive +40% in one month and a half can come to an end. Adding to this, the fact that tomorrow after the market closes will be released the full year 2011 results in which SIF5 will say they've made 83 Mil RON Net Profit, I think at least the price will stop here and take a break. If it will go down the price should stop around 1,30 and from here to continue its swings higher.

Tommorow also I'm expecting bad Retail Sales from US for January, so we'll see how the market will play out.


Good luck everybody!

Bucharest Stock Exchange - Long term strategic priorities

Here is the link with the presentation: http://www.bvb.ro/infocont/infocont12/BVB130212_en.pdf


At the press conference BSE board members and the president Lucian Anghel, outlined their long term view, which is:

• developing the Stock Exchange into a regional hub
• alternative to bank credits for companies
• listing new companies
• support for the Romanian government into privatization of different utilities companies
• launching three major services until 2015 (they haven't said which are)

They have a great and ambitious plan and high targets, which is a good thing, but the devil is in the details, in the implementation of this high targets. I personally wish them good luck in their plans, and i believe they need to focus on the followings:

• margin transactions - in this way from 10-12 Mil EURO per day volume they can reach, 100-120 Mil EURO per day
• market makers for all their derivatives products (futures contracts or options) - when the markets starts falling to be easy to buy PUT options on the main indexes (BET and BET-FI) and in this way not to be forced to sell your shares creating an even bigger snowball. Definition of Put Option = an option contract giving the owner the right, but not the obligation to sell a specified amount of an underlying security at a specified price within a specified time. Read more at: http://www.investopedia.com/terms/p/putoption.asp#ixzz1mGHL0cFx
• listing more companies from various industry sectors - IT was mentioned during press conference and I can add retail sales, various discretionary companies
• improving the image of stock markets in general and BSE in particular

Lucian Anghel started outlining the time factor "a woman needs nine months to give birth to a child, but you can't have nine women to give birth to a child in one month" - and I think every market participants will give enough time to Lucian Anghel to implement his vision and stategy.

All the best everybody.

Next week important economic data

Monday 13 February 

- ROM - 4th quarter and full year 2011 results from: Azomures (AZO),   BRD - Groupe Societe Generale (BRD), SIF Oltenia (SIF5)

- ROM – Balance of Payments

Tuesday 14 February
- ROM -  4th quarter and full year 2011 results from: Alro (ALR), Amonil (AMO), Antibiotice (ATB), Biofarm (BIO), Condmag  (COMI), Dafora (DAFR), Electromagnetica (ELMA), Property Fund (FP), Impact (IMP), Oltchim (OLT), Prodplast (PPL), Rompetrol Rafinare (RRC), Zentiva (SCD), SIF Banat Crisana (SIF1), SIF Transilvania (SIF3), SIF Muntenia (SIF4), Socep (SOCP), Turbomecanica (TBM), Transelectrica (TEL), Transgaz (TGN), Vrancart (VNC)
                                 - US - Retail Sales
                                 - GBP - Consumer Price Index
                                 - EU - Industrial Production
                                 - EU - German ZEW Economic Sentiment

Wednesday 15 February
  - ROM  - 4th quarter and full year 2011 results from: Banca Carpatica (BCC)
                                  - US - Industrial Production
                                  - US - FOMC (Federal Open Market Comity) Minutes
                                   - EU - ECOFIN Meeting
                                   - EU - Preliminary GDP

Thursday 16 February
                                  - US - Producer price index
                                  - US - Ben Bernanke speaks
                                  - US - Philly Fed Manufacturing Index

Friday 17 February
                                 - US - Consumer Price Index
                                 - GBP - Retail Sales

Next week the big news should be made by the never ending saga of Greece, followed by the FOMC minutes in which we will find out the latest discussions between Federal Comittee members regarding the interest rates and their projections.
In Romania the market players will wait for  fourth quarter and full year 2011 results of listed companies. I'm expecting positive results that will proper the market higher.

Great week everybody!

Banca Transilvania (TLV) chart

After the Head & Shoulder top figure created between January and August 2011, Banca Transilvania, break it down from 1,16 and entered into a downtrend. This downtrend took the figure of a Falling Wedge, which implied the sellers exhausted their ammunition and could enter in an uptrend soon. This uptrend had started with a Breakaway GAP at 0,916, which implies a new uptrend is taking place and we might see a Runaway GAP and an Exhaustion GAP. So far the price stopped at 1,07 but the real price resistance being at 1,15.

Happy trading!

SIF Moldova (SIF2) chart review

The price of SIF2 hits the resistance line at 1,45 and seems like it stopped here. I predict that for the time, the price is due for a small correction, given also the high MACD line (moving average convergence divergence) which is due for a turn. From an Elliott Wave point of you implies we are in a third wave which is very powerfull and should reach at least 1,88.

Happy trading !

Market reaction on Ungureanu approval

Market reaction on Ungureanu approval

This is SIF5 and as you can see, the markets were expecting a positive outcome by itching higher into the parliament approval.

Romanian markets awaiting the new government

Romanian markets awaiting the new government

Small variations on the markets, as market players are waiting for the recently appointed Mr. Ungureanu to be invested as prime minister by the  parliament.
If he's cabinet will fall, I think we'll see -10% on most of the companies by the end of the day. If he will be invested the markets will continue their upswing.

Good luck everybody.

SIF Oltenia (SIF5) Chart review

SIF Oltenia (SIF5) Chart review:

The price has a huge resistance around 1,33 area. One comes from the neckline of the Head & Shoulders and the other comes from the ascending line of the rising wedge. The buyers needs to break decisively the 1,33 resistance area. If they can't and the price starts moving lower, every market participant will see this rising wedge chart pattern and will sell it untill the price comes back to 1,00.
Fundamentally SIF5 has 83 Mil RON Net Profit for the 2011, which makes it a 9,08 PER (Price to Earnings Ratio) with a dividend yield 6 to 8% . This will be settled at the Shareholders meeting from April 2012. So fundamentally is not something that is screaming buy.



Good luck everybody.

Market reaction to prime minister Emil Boc resignation

As you can see, it had a bad reaction initially when the BETFI index reached -3,5% and was followed by the comeback on the idea that a new government will be installed pretty soon.

And here it is a bigger scale of the index:

Next week important economic data

For the next week, the economic calendar is pretty light and probably the biggest news in the markets will be the outcome of the Greece saga, followed by the China inflation data on Wednesday and interest rate decisions on Thursday in UK and EURO area.
I'm expecting no change in both cases, even though some are expecting more quantitative easing from the Bank of England, but in the light of the latest surprisingly good economic data from the economy, I don't expect more asset purchases.
In Romania there is nothing scheduled on the economic front. Starting 10 February Romanian companies will posts their 4 quarter and full year 2011 results. If nothing badly will come out of Greece negotiations I'm expecting the Romanian markets to continue their up swing.

Have a great week everybody.

Monday 6 February:    
                 - Quarterly results from Hasbro, Humana, Loews, Sysco, Yum Brands
                 - EU - German Factory Orders
Tuesday 7 February:
                 - Quarterly results from Coca-Cola, Walt Disney, Western Union
                 - EU - German Industrial Production

Wednesday 8 February:  

                 - Quarterly results from Cisco, Computer Sciences, News Corp, Sprint Nextel, Time Warner, Visa 

                 - EU - German Trade Balance
                  - CHINA - Consumer Price Index
                  - CHINA - Producer Price Index
Thursday 9 February:  
                 - Quarterly results from Pepsico
                 - GBP - Manufacturing and Industrial Production
                 - GBP - Official Bank Rate
                 - EU - Minimum Bid Rate
Friday 10 February:  
                 - Romania quarterly results: Bursa de valori (BVB), Compa (CMP), Teraplast (TRP)
                 - EU - French Industrial Production
                 - USA - Trade Balance

BET-FI Chart

BET-FI Index it is an index which comprise the followings:
Alongside being the weigh that they have in the index.

• Property Fond (FP)                 - 28,90%
• SIF Oltenia (SIF5)                  - 15,90%
• SIF Moldova (SIF2)               - 15,81%
• SIF Transilvania (SIF3)           - 15,21%
• SIF Banat Crisana (SIF1)        - 12,33%
• SIF Muntenia (SIF 4)              - 11,85%

The Chart has the look of a rising wedge, which implies the prices will run out of steam pretty soon and will return to where it started. That is around 18.000 points.

SIF Moldova (SIF2) Chart review

SIF Moldova finished the 2011 with a huge profit of 191 Mil RON, buoyed by the selling of their participation at the BCR (Romania Commercial Bank) to the major stockholder Erste Bank.
At a Price to Earnings Ratio SIF Moldova stands at 3,33, one of the lowest valuation from Romanian stock market.
The stock price seems like is making a pennant around 1,30 and I'm expecting the price to continue the upside move to 1,45. From Elliott Wave point of view looks like the price just finished a massive correction zig-zag ABC and it's lunching to a new impulsive wave to reach on the long term 1,88.

Good luck everybody.

Next Week Important Economic Data

Next week I'm expecting the Manufacturing Indexes from all around the world (China, Europe, USA) to put make a mark on the development of financial markets. Friday being a job report in USA, most of the markets participants will wait for that number to see the strength of the american economy, if it's getting steam or if it's slowing down. I'm expecting an in line with the expectations number, around +140,000 newly jobs created and the unemployment rate to remain steady at 8,5%.
In Romania, National Bank Guvernor Isarescu will decide the interest rate on Thursday. I'm expecting a no change in the idea of awaiting more data from the economy and the inflation, although another 25 basis point cut to 5,50 % it won't be a big surprise.

Have a great week everybody.

Monday 30 January:
                               - US -  Personal Spending & Personal Income
                               - EU -  Economic Summit
                               - ROM - Economic activities trends
Tuesday 31 January:
                               - Quarterly results from: Exxon, Pfizer, UPS, Amazon
                               - US -  S&P Case Schiller 20 House Price Index
                               - US -  Consumer Confidence
                               - US -  Chicago Manufacturing Index
                               - EU -  German retail sales
                               - EU -  Unemployment rate
                               - ROM - Unemployment rate
                               - CHINA - Manufacturing Index
Wednesday 1 February:
                                - Quarterly results from: Qualcomm, Whirlpool, Franklin Resources
                                - US -  ADP - Non-farm employment change
                                - US -  ISM Manufacturing Index
                                - US -  Total vehicle sales
                                - EU -  Final Manufacturing Index
                                - EU -  Consumer Price Index - Flash estimate
                                - ROM - International reserves published by National Bank of Romania
Thursday 2 February:
                                - Quarterly results from: Dow Chemical, Mastercard, Merck, Starwood
                                - US -  Chain Store Sales
                                - ROM - Romania National Bank - Interest Rate Decision
Friday 3 February:
                                - US -  Unemployment rate
                                - US -  Non-farm payrolls
                                - US -  Factory orders
                                - US -  ISM Non-Manufacturing Index
                                - EU - Final Services Index
                                - EU -  Retail sales
                                - GBP - Services Index
             

OMV Petrom (SNP) Chart

It is at the line of the first resistance at 0,330

OMV Petrom chart looks like forming a double bottom, implying there are more to the upside. Let's see what it will do at the firs resistance and then decide the trade. If it will run through it then the next resistance will be around 0,36. If not, it might test again the bottom around 0,275

Happy trading.