2011-06-17 Erste Financial Focus Weekly

8/6/2019 2011-06-17 Erste Financial Focus Weekly

1/14

Weekly Financial

Focus June 17, 2011

C/A balance contracted further (Jan-Apr-11)

Romania on the verge of administrative

reorganization

Leu loses ground amid jitters over Greece

Bond yields flat at the latest T-bonds auction


2/14

Weekly Financial Focus

BCR Research - Weekly Financial Focus Page 2

News & real economy

C/A balance contracted further in the first four months

The C/A deficit continued to narrow in the first fourmonths of 2011 (-46% y/y), amounting to EUR 1.2bn.This trend was mainly driven by the much higher growthrate of exports compared to imports, which translateddirectly into a considerably lower trade deficit (-41% y/y)during January and April. Also, net current transferswere up almost 90% in the first four months, reachingEUR 1.1bn with the increased profile of the publicsector. However, feeble investments, as well as weakprivate consumption, prevented imports from growingfaster in the first four months, but this shows that gettingout of recession is not easy.

FDIs were down almost 30% to EUR 444 million in thefirst four months and as mentioned before this showsthat foreign capital is still in two minds whether or not toresume investment process in Romania. Although this

could delay somewhat the rebound of the gross fixed

Structure of the C/A and FDIs

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

4M_07 4M_08 4M_09 4M_10 4M_11

EUR bn. -7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

EUR bn.

Current transfersIncomeTrade balance (G&S)FDIs (rhs)C/A balance (rhs)

Source: NBR and BCR Research

capital formation, we still see the economy advancing by 2% in 2011. The coverage rate of the C/A deficit was38.5% during January-April. Intra-group loans made up the bulk of the FDIs in the first four month amounting toEUR 324mn, while the balance was equity participations.

Romania on the verge of administrative reorganization

Ruling Democrat Liberal Party has put forward an administrative reorganization which should result in aconsiderably lower number of regions within Romania (8, as compared to 41 counties at present). DemocraticUnion of Hungarians in Romania, a key partner of the Democrat Liberals in the ruling coalition, rejected this projectand proposed instead an administrative reorganization with 16 regions.

A better absorption of European funds, a cut in current expenditures due to lay-offs and the elimination of someregional administrative entities as well as an increase in the quality of public services are the official reasons for the

reforms proposed by the Democrat Liberal Party. For the time being we see no significant risks for a breakup of theruling coalition and consider that the developments on the financial markets will be mainly driven by global factorslike the fiscal situation in Greece.

Leu weakens amid jitters over Greece

On Thursday, Greek worries began to weigh on leu which shed 1.5% against the European single currency, tradingat a four-month low of 4.245. Earlier this week, the NBR deputy governor said he did not see significant pressureon leu after the Greece downgrade, but the contagion risk remains a concern in the region. We see this statementas an indication of the NBRs willingness to step in the FX market if the situation gets worse. Taking into accountthe uncertainties surrounding Greece and the heightened risk aversion towards the region, we have revised ourEURRON forecast to 4.15 in December from a previous 4.1.

The MinFin sold 5-year T-bonds worth RON 330mn, at an average yield of 7.34%, unchanged as compared to theprevious auction. Investors submitted total bids worth RON 810mn, while the initial plans of the MinFin wereconsistent with an issuance of RON 600mn. The forecast for 5Y yields is unchanged, at 7.2% in December.

C o n t e n t s

News and real economy

FX, money market and FI

Capital market

Mutual funds


3/14



FX MarketSpot Sep-11 Dec-11 Mar-12 Jun-12

EURRON - eop 4.229 4.15 4.15 4.10 4.00

- Fwd 4.28 4.33 4.38 4.42

USDRON - eop 2.986 3.19 3.19 3.28 3.20

- Fwd 3.03 3.08 3.13 3.17

Source: BCR Research, Reuters

EUR RON and 30-day rolling volatility

4.05

4.10

4.15

4.20

4.25

4.30

4.35

4.40

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

2

3

4

5

6

7

8

9

10EURRON

30-day rolling volatility (rhs)

12m average


Money market & FISpot Sep-11 Dec-11 Mar-12 Jun-12

Key rate 6.25 6.25 6.25 6.50 6.75

ROBOR 3M 5.48 6.10 6.30 6.50 6.75

- Fwd 6.41 6.70 7.17 6.30

5-year T-bonds 7.4 7.2 7.2 7.1 7.0


Yields - 5-year T-bonds

7.2

7.3

7.4

7.5

7.6

7.7

7.8

7.9

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

%

7.2

7.3

7.4

7.5

7.6

7.7

7.8

7.9%

12m average


Government gross debt issuance

RON mn. Jun-09 Jun-10 Jun-11 6m09 6m10 6m11

T-bills 6,556 674 1,200 38,114 14,913 21,520

T-bonds 1,141 284 830 2,532 5,857 6,807

TOTAL 7,697 958 2,030 40,645 20,770 28,327

Source: Ministry of Public Finances

5Y CDS

150

200

250

300

350

400

450

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

150

200

250

300

350

400

450

RO HU


Maturing government debt securities

RON million J-11 J-11 A-11 S-11 O-11 N-11 D-11 J-12 F-12 M-12 A-12 M-12

- T-bills 2,108 246 2,191 2,985 832 3,124 2,473 4,341 2,561 1,899 4,043 2,641

- T-bonds 0 0 0 0 3,153 0 0 0 0 2,114 50 0

TOTAL 2,108 246 2,191 2,985 3,985 3,124 2,473 4,341 2,561 4,013 4,093 2,641Source: Reuters

EUR million J-11 J-11 A-11 S-11 O-11 N-11 D-11 J-12 F-12 M-12 A-12 M-12

- T-bills (local) - 1,213 - - - - - - - - - -

- Club loan - 1,235 - - - - - - - - - -

- Eurobonds - - - - - - - - - - - 700

TOTAL - 2,448 - - - - - - - - - -Source: Reuters


4/14



Auction schedule for government debt in June 2011

Debt instrumentAuction

dateIssuedate

MaturityCoupon

%

AmountplannedRON mn

Amountraised

RON mn

Yieldsavg.

%

T-bills 6-Jun-11 8-Jun-11 6-Jun-12 - 1,200 1,200 6.61

T-bonds 9-Jun-11 14-Jun-11 25-Oct-14 6.25 500 500 7.18

T-bonds 16-Jun-11 20-Jun-11 30-Apr-16 6.00 600 330 7.34

T-bills 20-Jun-11 22-Jun-11 20-Jun-12 - 1,400

T-bonds 23-Jun-11 27-Jun-11 11-Jun-21 5.95 600

Source: Ministry of Public Finances, Reuters

Capital marketFondul Proprietatea: City of London Investment Management owns 5.85% of shares

City of London Investment Management yesterday announced it holds 802.2mn Fondul Proprietatea (FP)shares representing 5.58% stake, out of which only 134mn shares were acquired directly on the BucharestStock Exchange (BSE). The rest of 668.2mn shares are held via warrants issued by Unicredit Bank whichaccording to market sources were acquired after FP floating on January 25, 2011.

The other important minority shareholder, with a 6.67% stake, is Georgia Palade Van Dusen, one of the heirsof the most famous Romanian industrialist from the interwar period. Ministry of Finance has 25.25% stake, thefree float being 62.23% (excluding the two holdings higher than 5%).

Industrial consumers to pay 30% higher gas price by March 2012

According to media the price of gas delivered to households will remain unchanged until March 2012, whileprices for some of the industrial consumers will grow by up to 30%. As a first step, the price will increase by10% in the next month. A gradually convergence of the domestic gas price to the import price (currently it ishalf of the Russian gas price) is strongly supportive for the profitability of gas producers Romgaz and Petrom.

The increasing pressure from the European Commission and IMF to speed up the liberalization of the gasand electricity markets is an important trigger for the profitability of energy producers from Fondul Proprietateaportfolio (Petrom, Romgaz, Hidroelectrica and Nuclearelectrica), wich, together with their listing, is the maindriver of FP valuation on the medium and long term.

Romanians President requires speeding-up IPOs of companies from FP portfolio

The Romanian president refused to promulgate the legislative initiative regarding the obligation for the state-owned companies from FPs portfolio to launch IPOs (for a minimum 5% stake) up to the end of 2014,requesting an earlier deadline.

The main companies from FP list that should launch IPOs are: Romgaz (already an IPO assumed for 1H2012), Hidroelectrica and Nuclearelectrica (last statements indicate IPOs for 15% stake earliest in 2013), CNAeroporturi Bucuresti, three power distribution grids, all port authorities, Posta Romana.

BET and BSE Turnover BSE and Rasdaq Turnover

0

100

200

300

400

Jun-10 Sep-10 Dec-10 Apr-11

Mn

1,000

3,000

5,000

7,000

9,000

11,000

Turnover (RON mn) BET (points)

8.20

13.02

9.64

14.04

0.28 0.12

2.130.71

0

2

4

6

8

10

12

14

16

10-Jun-11 14-J un-11 15-J un-11 16-J un-11

BVB Turnover (EUR mn) Rasdaq Turnover (EUR mn) Source: BCR Equity Research Source: BCR Equity Research


5/14



Mutual fundsMoney continues to pour into emerging-markets bond funds such as BCR Obligatiuni. It is not surprising thatthe bulk of inflows are going into local-currency denominated funds; more than 80% of the $4 billion that hasflowed into emerging-market bond funds so far this year, and nearly two thirds of the $13.6 billion in the last

12 months, has gone into new local-currency offerings. Some of this interest could simply be performance-driven. Local-currency bonds, and by extension the funds that own them, offer a potential remedy to severalpressing concerns for institutional investors, including low bond yields and exposure to over indebtedgovernment issuers. Local-debt issues also tend to have better credit ratings than hard-currency emerging-markets bonds. This is a covenant of the success of some emerging governments in cleaning up theirbalance sheets since the previous decade as well as to their superior growth prospects.


6/14



Annex

Macroeconomic indicators

1M_10 2M10 3M_10 4M10 6M_10 9M_10 12M_10 1M_11 2M_11 3M_11 4M_11

Industry y/y % ch. 6.9 2.7 4.1 5.2 5.6 5.2 5.5 11.9 12.2 11.4 9.4

- Manufacturing y/y % ch. 7.6 2.0 4.0 5.0 5.8 5.5 6.0 14.3 14.6 13.2 10.2

- Electricity, gas, steam

and air conditioning y/y % ch. 13.1 13.6 13.5 14.3 11.7 9.4 8.2 3.5 3.1 1.8 5.2

- Mining and quarrying y/y % ch. -14.0 -10.9 -12.4 -10.2 -9.2 -7.7 -6.9 1.6 2.1 3.8 5.9

- Capital goods y/y % ch. 23.2 13.9 11.9 11.9 11.2 9.0 8.9 13.9 14.3 14.1 8.6

- Durables y/y % ch. -11.9 -13.1 -9.4 -8.0 -5.9 -1.9 2.4 15.2 17.0 13.7 10.4

- Intermediery goods y/y % ch. 10.4 3.7 5.6 8.4 10.1 9.9 10.4 20.6 21.9 21.1 18.3

- Consumption goods y/y % ch. -15.0 -14.0 -8.2 -7.3 -6.1 -4.4 -3.5 7.9 6.3 2.6 2.8

New orders y/y % ch. 16.3 13.7 18.9 21.0 23.9 26.0 26.3 41.1 33.1 26.4 24.0

Constructions y/y % ch. -12.4 -19.5 -20.9 -19.9 -15.7 -16.4 -13.2 -8.5 -6.2 -4.4 -4.7- Residential y/y % ch. -42.4 -53.1 -41.0 -39.0 -34.0 -37.4 -35.7 0.3 0.6 -13.4 -20.8

- Non-residential y/y % ch. -28.4 -32.7 -30.1 -30.3 -22.4 -18.4 -13.6 -9.4 5.5 0.4 2.2

- Infrastructure y/y % ch. 16.3 13.5 -1.2 -0.3 -0.8 -4.7 -3.1 -10.7 -13 -3.3 -1.8

Retail sales y/y % ch. -11.4 -10.3 -7.5 -7.0 -4.1 -4.2 -5.3 -5.7 -6.0 -5.5 -5.2

- Food y/y % ch. -9.1 -9.2 -7.4 -7.7 -6.1 -7.0 -7.5 -7.4 -10.0 -10.7 -9.5

- Non-food y/y % ch. -13.5 -12.1 -8.9 -7.9 -4.9 -6.2 -7.9 0.5 -1.5 -1.3 -1.7

- Fuels y/y % ch. -10.7 -8.3 -4.7 -3.6 0.9 4.5 3.7 -15.4 -8.2 -5.1 -4.9

Auto vehicles sales and

related serv. y/y % ch. -29.4 -26.1 -17.8 -17.5 -11.9 -10.4 -6.6 10.7 10.3 4.8 3.5

Wholesale (nom. growth) y/y % ch. -16.2 -15.2 -7.0 -5.4 -3.7 -1.6 1.1 27.4 25.5 18.4 n/a

Household services y/y % ch. 7.0 8.4 8.4 9.8 11.8 12.5 12.0 7.3 8.4 7.4 7.5

Services to companies

(nom. growth) y/y % ch. -2.4 -3.3 -2.4 -1.3 2.1 2.1 3.1 5.0 5.2 4.6 n/a

Exports (FOB) y/y % ch. 20.5 21.9 20.0 23.5 26.2 26.6 28.1 47.9 42.2 39.4 33.3

mn. 2,313 4,876 7,902 10,798 17,164 26,855 37,253 3,421 6,933 11,013 14,392

- EU exports y/y % ch. 17.7 19.1 18.8 21.9 24.2 23.7 24.7 39.9 37.7 35.3 30.6

mn. 1,750 3,670 5,887 7,962 12,595 19,477 26,873 2,449 5,055 7,964 10,401

Imports (CIF) y/y % ch. 6.5 8.1 13.1 15.7 20.6 19.4 19.9 30.1 26.0 25.7 22.2

mn. 2,786 6,000 9,955 13,736 22,052 33,863 46,716 3,625 7,557 12,513 16,789

- EU imports (CIF) y/y % ch. 2.0 4.5 10.5 13.6 17.4 18.1 19.4 30.7 28.2 23.3 20.4

mn. 1,976 4,285 7,225 9,953 15,873 24,505 33,837 2,583 5,491 8,907 11,987

Trade deficit (FOB-FOB) mn. -258 -662 -1,287 -1,881 -3,024 -4,303 -5,905 91 -5.0 -455 -1,105

C/A deficit mn. -111 -747 -1,544 -2,149 -3,647 -4,233 -4,969 -15 -44 -634 -1,152

FDIs (inflows) mn. 302 140 486 623 1,838 2,070 2,596 240 294 379 444

CPI eop - % 5.20 4.49 4.20 4.28 4.38 7.77 7.96 6.99 7.60 8.01 8.34

- Core 2 (unadj.) eop - % 5.32 4.98 4.41 4.22 4.53 6.81 6.23 5.06 5.49 5.61 5.67

Gross wages RON 1,967 1,940 2,074 1,973 1,951 1,846 2,067 1,963 1,944 2,056 2,066

y/y % ch. 12m 8.0 6.8 6.0 5.3 4.7 2.8 2.5 1.9 1.6 0.8 1.1

Budget balance % of GDP 0.0 -1.1 -1.6 -2.4 -3.4 -4.6 -6.5 0.2 -0.4 -1.0 -0.8

RON mn. 15.4 -5,819 -8,422 -12,122 -18,070 -23,325 -33,305 819 -2,341 -5,190 -4,356

EUR/RON eop 4.12 4.11 4.10 4.13 4.37 4.27 4.28 4.25 4.22 4.11 4.07

avg 4.14 4.13 4.11 4.12 4.15 4.18 4.21 4.26 4.25 4.22 4.19

Key rate eop -% 7.50 7.00 6.50 6.50 6.25 6.25 6.25 6.25 6.25 6.25 6.25

ROBOR 3M eop -% 8.3 6.9 5.7 6.0 7.2 6.8 6.2 5.0 6.4 5.7 5.7

avg - % 8.8 8.0 7.4 6.8 6.8 6.8 6.7 5.3 5.7 6.1 5.7

Source: NIS, Central Bank, MoF, BCR Research


7/14



Gross Domestic Product Households consumption

-5

-4

-3

-2

-1

0

1

2

3

4

5

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

%, q/q s.a

-10

-8

-6

-4

-2

0

2

4

6

8

10%, y/y n.s.a

-8

-6

-4

-2

0

2

4

6

8

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

%, q/q s.a

-18

-15-12

-9

-6-3

0

36

9

1215

18%, y/y n.s.a.

Source: Eurostat, BCR Research Source: Eurostat, BCR Research

Gross fixed capital formation Exports and imports of goods and services

-35

-30

-25

-20

-15

-10

-5

0

5

10

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

%, q/q s.a

-40

-30

-20

-10

0

10

20

30%, y/y n.s.a.

-15

-10

-5

0

5

10

15

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

%, q/q s.a

-30

-20

-10

0

10

20

30%, y/y n.s.a.

Exports Imports


Industry Agriculture

-8

-6

-4

-2

0

2

4

6

8

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

%, q/q s.a

-12

-10-8

-6

-4-2

0

24

6

810

12%, y/y n.s.a.

-25

-20

-15

-10

-5

0

5

10

15

20

25

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

%, q/q s.a

-35-30-25-20-15-10-505101520253035%, y/y n.s.a.


Construction Trade , financial intermediation, real estate

-10

-8

-6

-4

-2

0

2

4

6

8

10

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

%, q/q s.a

-20

-15

-10

-5

0

5

10

15

20

25

30

35%, y/y n.s.a.

-7-6-5-4-3-2-101234567

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

1Q_

08

2Q_

08

3Q_

08

4Q_

08

1Q_

09

2Q_

09

3Q_

09

4Q_

09

1Q_

10

2Q_

10

3Q_

10

4Q_

10

1Q_

11

%, q/q s.a

-15

-10

-5

0

5

10

15%, y/y n.s.a.

Wholesale & retail trade Financial intermediation; real estate



8/14



Industry %, real ch. 2005=100% (s.a.) Industry breakdown %, real ch. 2005=100% (s.a.)

110

115

120

125

130

135

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

%

110

115

120

125

130

135%

70

80

90

100

110

120

130

140

150

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

%

70

80

90

100

110

120

130

140

150%

ManufacturingElectricity, gas, steamMining


Industry breakdown %, real ch. 2005=100% (s.a.) Industry breakdown %, real ch. 2005=100% (s.a.)

110

120

130

140

150

160

170

180

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

%

110

120

130

140

150

160

170

180%

Intermediate Capital

85

90

95

100

105

110115

120

125

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

%

85

90

95

100

105

110115

120

125%

Durables Cons um er


New orders %, change 2005=100% (s.a.) IPPI - %, change 2005=100%

100

120

140

160

180

200

220

240

260280

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

%

100

120

140

160

180

200

220

240

260280%Domestic

External

120

125

130

135

140

145

150

155

160

165

170

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

%

120

125

130

135

140

145

150

155

160

165

170%

Domes tic External


Construction %, real ch. 2005=100% (s.a.) Construction breakdown %, real ch. 2005=100% (s.a.)

130

140

150

160

170

180

190

200

210

220

Dec-07

Feb-08

Apr-

08

Jun-

08

Aug-

08

Oct-08

Dec-08

Feb-09

Apr-

09

Jun-

09

Aug-

09

Oct-09

Dec-09

Feb-10

Apr-

10

Jun-

10

Aug-

10

Oct-10

Dec-10

Feb-11

Apr-

11

%

130

140

150

160

170

180

190

200

210

220%

100

120

140

160

180

200

220

240

260

Dec-07

Feb-08

Apr

-08

Jun

-08

Aug

-08

Oct-08

Dec-08

Feb-09

Apr

-09

Jun

-09

Aug

-09

Oct-09

Dec-09

Feb-10

Apr

-10

Jun

-10

Aug

-10

Oct-10

Dec-10

Feb-11

Apr

-11

%

100

120

140

160

180

200

220

240

260%

Civil engineering

Buildings



9/14



Retail sales %, real ch. 2005=100% (s.a.) Retail sales breakdown %, real ch. 2005=100% (s.a.)

130

140

150

160

170

180

190

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

%

130

140

150

160

170

180

190%

120

130

140

150

160

170

180

190

200

210

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

%

120

130

140

150

160

170

180

190

200

210%

FoodFuelsNon-food


Exports-Imports growth differential Exports 12-month rolling

-15

-10

-5

0

5

10

15

20

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

pp

-15

-10

-5

0

5

10

15

20pp

20

22

24

26

28

30

32

3436

38

40

42

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

EUR bn.

20

22

24

26

28

30

32

3436

38

40

42EUR bn.

Source: NIS, BCR Research Source: NIS, BCR Research

C/A balance, trade balance and FDIs 12m rolling Average gross wage development

-20

-16

-12

-8

-4

0

4

8

12

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

EUR bn.

-20

-16

-12

-8

-4

0

4

8

12

FDIs C/A balance

130

135

140

145

150

155

160

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

2005=100%

1,400

1,500

1,600

1,700

1,800

1,900

2,000RON

Gross wage (rhs)

% change, real

Source: Central Bank, BCR Research Note: 2005 average wage was RON 968 Source: NIS, BCR Research

Employment index %, real ch. 2005=100% (s.a.) Fiscal deficit 12m rolling (reversed scale)

60

70

80

90

100

110

120

130

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

%

60

70

80

90

100

110

120

130%

ConstructionRetail salesIndustry

-45

-40

-35

-30

-25

-20

-15

-10

-5

0

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

RON bn. -45

-40

-35

-30

-25

-20

-15

-10

-5

0

RON bn.

Source: Eurostat Source: MinFin, BCR Research


10/14



Key rate, headline and core inflation Key rate and ROBOR monthly average

4

5

6

7

8

9

10

11

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

%

4

5

6

7

8

9

10

11%CPI

Key rate

CORE 2

4

6

8

10

12

14

16

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

%

4

6

8

10

12

14

16%

ROBOR 3m Key rate

* Not adjusted Source: NBR, BCR Research Source: NBR, BCR Research

REPO auctions Deposits auction

0

24

6

8

1012

14

16

10-Nov-08

27-Apr-09

25-May-09

12-Jun-09

09-Jul-09

27-Aug-09

05-Oct-09

12-Oct-09

25-Jan-10

24-Feb-10

02-Mar-11

31-May-11

RONb

illion

56789101112

1314%REPO

Interest rate, avg.(rhs)

0

1

2

3

4

5

6

7

8

9

28-Dec-07

16-Jan-08

22-Jan-08

30-Jan-08

20-Feb-08

10-Mar-08

31-Mar-08

16-Apr-08

23-Apr-08

16-Jun-08

21-Jul-08

29-Sep-08

19-Dec-08

23-Apr-10

20-Aug-10

17-Jan-11

RONbillion

5

6

7

8

9

10

11%DEPO

Interest rate, avg. (rhs)

Source: NBR, BCR Research Source: NBR, BCR Research

Inter-bank deposits (daily avg. transactions) FX turnover and EURRON average

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

RONb

n

-1

1

3

5

7

9

11

13

15%Interbank deposits

Interest rate avg. (rhs)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

EUR bn

3.5

3.6

3.7

3.8

3.9

4.0

4.1

4.2

4.3

4.4

4.5FX turnoverEURRON - avg. (rhs)

Source: NBR, BCR Research Source: NBR, BCR Research

Gov. debt papers (RON denominated)* Gov. debt papers (EUR denominated)*

0

1

2

3

4

5

6

7

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

RON billion

5

6

7

8

9

10

11

12

13

14

15%Transactions (daily avg.)

Yields avg. (rhs)

0

5

10

15

20

25

30

35

40

45

Aug-

09

Sep-09

Oct-09

Nov-

09

Dec-09

Jan-

10

Feb-10

Mar-

10

Apr-

10

May-10

Jun-

10

Jul-

10

Aug-

10

Sep-10

Oct-10

Nov-

10

Dec-10

Jan-

11

Feb-11

Mar-

11

Apr-

11

May-11

E

URm

illion,dailyaveragetransaction

0

5

10

15

20

25

30

35

40

45

* Secondary market Source: NBR, BCR Research * Secondary market Source: NBR, BCR Research


11/14



Auction schedule for government debt in October 2010


dateIssuedate

MaturityCoupon

%

AmountplannedRON mn

Amountraised

RON mn

Yieldsavg.

%

T-bills 4-Oct-10 6-Oct-10 6-Apr-11 - 1,000 910 7.0

T-bonds 7-Oct-10 11-Oct-10 25-Jul-13 6.25 300 Scrapped

T-bills 11-Oct-10 13-Oct-10 12-Oct-11 - 1,000 371 7.0

T-bills 18-Oct-10 20-Oct-10 20-Apr-11 - 1,000 1,155 7.0

T-bonds 21-Oct-10 25-Oct-10 30-Apr-15 6.00 300 200 7.0

T-bills 25-Oct-10 27-Oct-10 26-Oct-11 - 1,000 461 7.0

Auction schedule for government debt in November 2010


date

Issue

date

MaturityCoupon

%

Amountplanned

RON mn

Amountraised

RON mn

Yieldsavg.

%

T-bills 1-Nov-10 3-Nov-10 4-May-11 - 1,000 1,464 7.0

T-bonds 4-Nov-10 8-Nov-10 25-Jul-13 6.25 300 120 7.1

T-bills 8-Nov-10 10-Nov-10 9-Nov-11 - 1,000 1,000 7.3

T-bills 15-Nov-10 17-Nov-10 18-May-11 - 1,000 792 6.96

T-bonds 18-Nov-10 22-Nov-10 30-Apr-15 6.00 300 scrapped

T-bills 22-Nov-10 24-Nov-10 23-Nov-11 - 1,000 1,000 7.22

T-bonds 25-Nov-10 29-Nov-10 29-Nov-13 4.50 EUR 1bn. 1.3 4.8

Auction schedule for government debt in December 2010


dateIssuedate

MaturityCoupon

%

AmountplannedRON mn

Amountraised

RON mn

Yieldsavg.

%

T-bills 6-Dec-10 8-Dec-10 8-Jun-11 - 1,000 1,000 6.88

T-bills 13-Dec-10 15-Dec-10 14-Dec-11 1,000 1,473 7.00

T-bonds 16-Dec-10 20-Dec-10 25-Jul-13 6.25 500 500 7.17

T-bills 20-Dec-10 22-Dec-10 22-Jun-11 800 1,776 6.71

T-bonds 23-Dec-10 27-Dec-10 30-Apr-15 6.00 300 534 7.27

T-bills 27-Dec-10 29-Dec-10 28-Dec-11 - 1,000 1,000 6.96

Auction schedule for government debt in January 2011


dateIssuedate

MaturityCoupon

%

AmountplannedRON mn

Amountraised

RON mn

Yieldsavg.

%

T-bills 4-Jan-11 6-Jan-11 5-Jan-12 - 1,000 1,000 6.91

T-bonds 6-Jan-11 10-Jan-11 25-Jul-13 6.25 500 1,085 7.12

T-bills 10-Jan-11 12-Jan-11 11-Jan-12 - 800 800 6.81

T-bills 17-Jan-11 19-Jan-11 18-Jan-12 - 1,000 2,541 6.69

T-bonds 20-Jan-11 24-Jan-11 30-Apr-15 6.00 500 500 7.16

T-bills 24-Jan-11 26-Jan-11 26-Aug-11 - 1,000 1,000 6.28


12/14



Auction schedule for government debt in February 2011


dateIssuedate

MaturityCoupon

%

AmountplannedRON mn

Amountraised

RON mn

Yieldsavg.

%

T-bonds 3-Feb-11 7-Feb-11 25-Jul-13 6.25 800 775 7.11

T-bonds 3-Feb-11 7-Feb-11 30-Apr-15 6.00 500 500 7.16

T-bills 7-Feb-11 9-Feb-11 8-Feb-12 - 1,500 1,500 6.73

T-bills 14-Feb-11 16-Feb-11 17-Aug-11 - 600 600 6.55

T-bonds 17-Feb-11 21-Feb-11 11-Jun-17 6.75 500 284.1 7.35

T-bills 21-Feb-11 23-Feb-11 22-Feb-12 - 1,500 959 6.88

Auction schedule for government debt in March 2011


dateIssuedate

MaturityCoupon

%

AmountplannedRON mn

Amountraised

RON mn

Yieldsavg.

%

T-bonds 3-Mar-11 7-Mar-11 25-Jul-13 6.25 600 Scrapped

T-bills 7-Mar-11 9-Mar-11 7-Mar-12 - 600 600 6.92

T-bills 14-Mar-11 16-Mar-11 14-Sep-11 - 1,000 1,000 6.85

T-bonds 17-Mar-11 21-Mar-11 30-Apr-15 6.00 400 317 7.35

T-bills 21-Mar-11 23-Mar-11 21-Mar-12 1,000 1,300 6.97

T-bonds 24-Mar-11 28-Mar-11 11-Jun-17 6.75 300 412 7.40

Auction schedule for government debt in April 2011


dateIssuedate

MaturityCoupon

%

AmountplannedRON mn

Amountraised

RON mn

Yieldsavg.

%

T-bills 4-Apr-11 6-Apr-11 4-Apr-12 - 1,000 1,754 6.88

T-bonds 7-Apr-11 11-Apr-11 25-Oct-14 6.25 500 500 7.29

T-bills 11-Apr-11 13-Apr-11 11-Apr-12 - 1,000 2,289 6.84

T-bonds 14-Apr-11 18-Apr-11 30-Apr-16 6.00 500 289 7.38

T-bills 18-Apr-11 20-Apr-11 19-Sep-11 - 1,000 1,214 6.32

Auction schedule for government debt in May 2011


dateIssuedate

MaturityCoupon

%

AmountplannedRON mn

Amountraised

RON mn

Yieldsavg.

%

T-bills 2-May-11 4-May-11 2-May-12 - 1,500 1,641 6.85

T-bonds (EUR denominated) 4-May-11 6-May-11 6-May-14 4.50 EUR 600mn EUR 939mn 4.89

T-bonds 5-May-11 9-May-11 25-Oct-14 6.25 500 206 7.31

T-bills 9-May-11 11-May-11 9-May-12 - 1,000 1,000 6.89

T-bills 16-May-11 18-May-11 16-Nov-11 - 800 1,124 6.29

T-bonds 19-May-11 23-May-11 30-Apr-16 6.00 500 500 7.34

T-bonds 26-May-11 30-May-11 11-Jun-21 5.95 500 500 7.45


13/14



Fund key facts & performance updated as of June 15, 2011

Fund

Return at

36 months

(%)

Return at

12 months

(%)

Return

6 months

(%)

AUM

(mil. RON)

No.

Investors

MONEY MARKET FUNDS

RAIFFEISEN RON PLUS - 7.83 3.77 1,410.8 30,458

BCR MONETAR 34.62 7.60 3.64 1,497.1 65,652

OTP COMODISRO 29.90 7.58 3.50 135.2 2,456

SIMFONIA 1 29.56 6.76 3.28 407.9 14,721

BOND FUNDS

BCR OBLIGATIUNI 35.10 8.70 4.28 1,014.9 34,253

CERTINVEST OBLIGATIUNI 37.29 8.04 3.74 13.4 401

BT OBLIGATIUNI - 7.43 3.56 138.2 4,794

STABILO 21.79 6.16 2.76 18.4 989

BRD OBLIGATIUNI 14.67 6.15 2.97 17.1 487

DIVERSIFIED FUNDS (DEFENSIVE)

CARPATICA GLOBAL - 12.2 3.7 50.6 293

BT CLASIC 20.6 8.4 4.2 38.9 727

DIVERSIFIED FUNDS (BALANCED)

OTP BALANSISRO 8.6 17.4 12.4 2.9 88

BCR DINAMIC -0.3 15.0 10.0 33.8 2,547

INTEGRO -6.8 12.4 6.1 15.6 11,267

TRANSILVANIA -22.5 10.4 6.5 24.3 771

RAIFFEISEN BENEFIT 3.9 6.5 3.1 23.8 405

DIVERSIFIED FUNDS (DYNAMIC)

CARPATICA STOCK - 17.8 4.7 13.5 299

NAPOCA -63.1 13.6 9.7 11.3 1,334

CERTINVEST DINAMIC -36.0 13.3 7.4 10.6 1,527

DIVERSIFIED FUNDS (FLEXIBLE)

BRD ACTIUNI EUROPA - 14.4 7.0 15.4 131

BRD DIVERSO EUROPA - 13.7 5.9 24.0 257

ZEPTER ACTIUNI 0.3 3.0 0.8 8.9 16

EQUITY FUNDS

BCR EXPERT -25.8 24.4 15.4 14.8 849

KD MAXIMUS -8.0 19.9 4.9 40.8 794OTP AVANTISRO -34.4 16.5 11.1 10.2 252

BT INDEX ROTX -17.7 16.2 7.5 23.7 459

BT MAXIM -45.0 11.6 8.2 63.5 2,199

RAIFFEISEN ROMANIA ACTIUNI -56.5 9.4 7.0 17.1 510

RAIFFEISEN PROSPER -22.1 1.4 -4.4 35.2 1,099

ACTIVE DINAMIC -42.1 -4.9 -1.4 12.79 2015

ALTERNATIVE FUNDS

BCR EUROPA AVANSAT (RON) 11.8 12.2 5.9 9.9 8

RAIFFEISEN CONFORT (RON) 27.5 5.2 2.1 20.1 731

RAIFFEISEN CONFORT S2 (RON) - 4.1 0.2 34.8 740

BRD EUROFOND (EUR) - 7.1 2.8 68.5 1,464RAIFFEISEN EURO PLUS (EUR) - 4.0 2.0 225.5 8,725

Source: Erste Asset Management


14/14



Chief Economist Dr.Lucian Anghel +4 (021) 312 67 73/1020

Macro Research and Fixed Income

Dumitru Dulgheru +4 (021) 312 67 73/1025

Florin Eugen Sinca +4 (021) 312 67 73/1026

Dorina Cobscan +4 (021) 312 67 73/1028

Capital Market Research

Mihai Iulian Cruntu +4 (021) 311 27 54/4816Raluca Ungureanu +4 (021) 311 27 54/4842

Erste Asset Management

Eduard Inizian Institutional clients manager +40 372 269 920

This research report was prepared by Erste Group Bank AG (Erste Group) or its affiliate named herein. The individual(s) involved in the preparation of the reportwere at the relevant time employed in Erste Group or any of its affiliates. The report was prepared for Erste Group clients. The information herein has been obtainedfrom, and any opinions herein are based upon, sources believed reliable, but we do not represent that it is accurate or complete and it should not be relied upon assuch. All opinions, forecasts and estimates herein reflect our judgment on the date of this report and are subject to change without notice. The report is not intendedto be an offer, or the solicitation of any offer, to buy or sell the securities referred to herein. From time to time, Erste Group or its affiliates or the principals oremployees of Erste Group or its affiliates may have a position in the securities referred to herein or hold options, warrants or rights with respect thereto or othersecurities of such issuers and may make a market or otherwise act as principal in transactions in any of these securities. Erste Group or its affiliates or the principalsor employees of Erste Group or its affiliates may from time to time provide investment banking or consulting services to or serve as a director of a company beingreported on herein. Further information on the securities referred to herein may be obtained from Erste Group upon request. Past performance is not necessarilyindicative for future results and transactions in securities, options or futures can be considered risky. Not all transactions are suitable for every investor. Investorsshould consult their advisor, to make sure that the planned investment fits into their needs and preferences and that the involved risks are fully understood. Thisdocument may not be reproduced, distributed or published without the prior consent of Erste Group. Erste Group Bank AG confirms that it has approved anyinvestment advertisements contained in this material. Erste Group Bank AG is regulated by the Financial Market Authority (FMA) Otto-Wagner-Platz 5,1090 Vienna,and for the conduct of investment business in the UK by the Financial Services Authority (FSA).

Please refer to www.erstegroup.com for the current list of specific disclosures and the breakdown of Erste Groups investment recommendations.

2011-06-17 Erste Financial Focus Weekly

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