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19 February 2015
RON exchange rate
Proposals for extensive fiscal relaxation starting 2016
Yesterday, the Finance Minister presented the plans of the new
Fiscal Code and
Fiscal Procedure Code which contains extensive fiscal relaxation
measures to be
taken in the period 2016-2019.
Among the most important fiscal measures planned to be
implemented in 2016 there
are: decreasing VAT rate to 20% from 24% currently, and also
reducing VAT rate for
food products such as meat, fish, fruits and vegetables to 9%;
elimination of tax on
special construction (1% at present); removal of tax on
dividends; reduction of
excises, and a change of the turnover tax for microenterprises.
Furthermore, in 2017
are projected reductions of social security contributions of
employees and employers,
in 2018 it is planned a reduction of VAT rate, and in 2019 it is
planned the decrease
of the flat tax to 14% from the actual level of 16%.
After public debate, the project should be sent to the
Parliament to be amended and
voted in order to be enforced. The Finance Ministry estimates
that the measures would
result in a direct gross loss in public revenues amounting to
RON 16.3bn in 2016 (or
2.2% of GDP). However, additional public revenues would be
indirectly obtained as
a result of a faster economic growth (additional disposable
income, consumption and
investments) fuelled by these measures and better collection.
The resulting gain in
public revenues is estimated by the Finance Ministry at around
RON 9.5bn in 2016
(or 1.3% of GDP). So, the net negative impact of the planned
fiscal relaxation
measures on the public revenues and the public budget deficit in
2016 is estimated at
only RON 6.8 bn or around 0.9% of GDP.
We think that the implementation of the planned fiscal
relaxation measures have
good chances to result in a budget deficit higher than one
allowed at the moment for
Romania under EU fiscal surveillance rules (structural deficit
of around 1.0% of GDP).
At the moment, it is not clear if these fiscal measures have
been discussed with the
representatives of the IMF and the European Commission during
the recent visit to
Bucharest (27 Jan -10 Feb). In our view, the proposed measures
diminish
considerably the chances for the continuation of the current
precautionary Stand-By
Agreement which expires in September 2015 and for the conclusion
of a new accord
with IMF.
The Finance Ministry plans to borrow RON 700 mn in 5.2 Y T-bonds
at the tender
scheduled for today. Taking into account developments of the
yield curve (steep
upward shift) in the last days, todays result might be close to
2.53% for the average
yield. Current Bloomberg BVAL bid/ask quotation (%) is
2.52/2.44.
4.30
4.40
4.50
4.60
4.70
4.80
3.60
3.70
3.80
3.90
4.00
4.10
18-Feb11-Feb4-Feb28-Jan
USD/RON (rhs)EUR/RON
Source: Daily NBRs fixing
RON money market rates
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
18-Feb11-Feb4-Feb28-Jan21-Jan
Robor 1M Robor 3M Robor 6M
Source: Daily NBRs fixing
Equity market
6500
6750
7000
7250
7500
28000
29000
30000
31000
32000
18-Feb11-Feb4-Feb28-Jan21-Jan
BET FI (rhs)
BET
Source: Bucharest Stock Exchange
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Romanian financial markets*
RON fixing Money market
1 day (%) ROBID ROBOR
EUR 4.4503 0.05 O/N 0.17 0.51USD 3.9079 0.07 1W 0.20 0.65CHF
4.1623 1M 0.25 0.70JPY (100) 3.2767 3M 0.95 1.42GBP 6.0274 6M 0.97
1.64CAD 3.1453 9M 1.02 1.68AUD 3.0478 12M 1.02 1.68SEK 0.4666DKK
0.5978NOK 0.5200HUF(100) 1.4453
*NBR fixings as of 18 Feb 2015 (13.00 local time)
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
3.2
3.3
3.5
3.6
3.7
3.9
4.0
4.1
18-Feb-155-Dec-1426-Sep-14
USD/RON (rhs)EUR/RON
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
18-Feb-1520-Nov-1428-Aug-14
ROBOR 1W ROBOR 1MROBOR 6M
Note: Specific money market rules apply to establish the
validity of ROBOR fixings
Historical FX trends
1M 3M 6M 1Y YTDEUR/RON 1.0 1.4 -0.1 0.3 -0.7USD/RON 16.5 21.6
21.0 19.6 6.0change in %; negative values= RON appreciation
Historical money market trends
1M 3M 6M 1Y YTDROBOR 1M 0.0 -0.4 -1.1 -2.9 -0.2ROBOR 3M -0.2
-0.4 -0.8 -2.2 -0.3ROBOR 6M -0.2 -0.5 -0.9 -2.0 -0.4change in
percentage points
International financial markets
FX market rates* Euribor Libor Usd
1 day (%)
EUR/USD 1.1414 0.18 O/N -0.040 0.1175
GBP/USD 1.5452 0.70 1W -0.032 0.1379
USD/CHF 0.9423 0.52 1M 0.001 0.1735
USD/JPY 118.72 -0.32 3M 0.047 0.2567
* 9.00 a.m local time 6M 0.127 0.3819
9M 0.186 n.a.
12M 0.258 0.6746
Libor Usd fixing on 17 Feb 2015
Euribor fixing on 17 Feb 2015 IRS 2Y 0.137 0.9680
EUR IRS rates on 17 Feb 2015 , 16.00 IRS 5Y 0.327 1.7330
USD IRS rates on 17 Feb 2015 , 16.00 IRS 10Y 0.721 2.2240
99
102
105
108
111
114
117
120
123
1.11
1.13
1.15
1.17
1.19
1.21
1.23
1.25
1.27
1.29
1.31
1.33
1.35
19-Feb20-Nov28-Aug
EUR/USD (rhs)USD/JPY
-0.1%
0.0%
0.1%
0.2%
0.3%
0.4%
18-Feb-1520-Nov-1428-Aug-14
Euribor 1M
Euribor 6M
Note: Specific money market rules apply to establish the
validity of LIBOR USD and EURIBOR fixings
Raiffeisen Bank daily rates
FX quotations
Bid Ask Bid Ask
EUR/RON 4.3950 4.5150 4.3800 4.5200USD/RON 3.8250 3.9500 3.8200
3.9550GBP/RON 5.9350 6.0800 5.9000 6.1100CHF/RON 4.0380 4.1770
4.0350 4.1800
EXCHANGE HOUSETDY/TDY
Bid Ask
EUR/USD 1.1127 1.1804EUR/GBP 0.7229 0.7607EUR/CHF 1.0522
1.1181EUR/JPY 132.38 139.35
TDY/TDY cross rates
Raiffeisen Banks FX quotations as of 8.30 a.m. (local time); FX
quotations may change during the working day due to the market
movements. For foreign exchange transactions, rates for amounts
greater than EUR 20,000 or equivalent are negotiable. Treasury
sales phone: +40-21-306 19 91
Interest rates for corporations
RON USD EUR CHF GBP
O/N 0.010 0.038 0.000 0.000 0.0601W 0.010 0.050 0.038 0.000
0.0632W 0.034 0.060 0.050 0.000 0.0593W 0.059 0.070 0.059 0.000
0.0551M 0.140 0.104 0.090 0.000 0.0923M 0.350 0.111 0.098 0.000
0.102
Effective today Min. amount: 5.000 units in each currency
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Local government bond market
Yields for RON gov securities RON yield curve Dynamics of RON
yields
Tenor
Yield (%,
bid)
Yield (%,
ask)
6M 1.50 1.211Y 1.63 1.383Y 2.17 1.965Y 2.32 2.1010Y 3.16
2.94
NBR's fixing on 18 Feb 201512.00 local time For trading RON
government securitiesyou can contact our sales department
+40-21-306 19 91
1.0
1.5
2.0
2.5
3.0
3.5
4.0
6M 1Y 3Y 5Y 10Y
Curent 1 month ago
* yields to maturity (%, mid)
0.0
1.0
2.0
3.0
4.0
5.0
18-Feb-1515-Dec-1414-Oct-14
6M 1Y 3Y5Y 10Y
* yields to maturity (%, mid)
Auctions Calendar for RON government securities
Auction date
Tenor
(Months)
Avg
Yield
Max
yield
Auction
date
Tenor
(Years)
Cupon
(%)
Avg
Yield
Max
yield
Intended Effective Intended Effective
12-Feb-15 12.0 800 800 1.46 1.50 2-Feb-15 12.5 5.80 600 600 2.94
2.98
23-Feb-15 3.0 500 5-Feb-15 4.4 4.75 600 600 1.99 2.01
9-Feb-15 10.0 4.75 600 600 2.81 2.8516-Feb-15 2.9 3.25 700 700
1.94 1.9819-Feb-15 5.2 5.75 700
Discount T-Bills Benchmark T-Bonds
Amount (RON mn) Amount (RON mn)
Romanian Eurobonds Romania CDS
Currency Maturity Cupon Bid price Ask price
Bid
yield(%)
Ask yield
(%)
EUR Mar-2015 5.00 100.28 100.43 1.02 -0.97
EUR Jun-2016 5.25 106.20 106.47 0.52 0.33
EUR Jun-2018 6.50 118.28 118.93 0.89 0.71
EUR Nov-2019 4.88 116.63 117.63 1.22 1.02
EUR Sep-2020 4.63 116.70 117.86 1.48 1.29
USD Feb-2022 6.75 120.26 120.85 3.45 3.36
USD Feb-2023 4.38 106.00 107.00 3.55 3.42 Note: Yields and CDS
quotation as of: 18 Feb 2015 (16.00 local time) Source: Thomson
Reuters
118
110
120
130
140
150
160
18-Feb-155-Dec-1426-Sep-14
RO 5-year CDS (USD)
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Romanian equity markets: daily trading summary
Market trends Most traded Close-end investment funds
Index Value 1D (%)
BET 7311.36 1.20
BET-TR 7984.29 1.20
BETPlus 1076.58 1.16
BET-FI 31238.11 1.27
Company Close (RON) 1D (%)
SIF MUNTENIA S.A. 0.87 -1.0
S.N.G.N. ROMGAZ S.A. 34.01 0.7
OMV PETROM S.A. 0.38 2.0
FONDUL PROPRIETATEA 0.89 2.2
ELECTRICA SA 12.68 1.7
Company Close (RON) 1D (%)Fd. Propr. 0.89 2.2
SIF 1 1.39 1.0
SIF 2 1.73 1.2
SIF 3 0.27 1.7
SIF 4 0.87 -1.0
SIF 5 1.70 1.4 BSE turnover (EUR mn) 12.3
BSE market capitalisation (EUR mn) 31.1
End of day values as of: 18 Feb 2015, 18.00 local time.
Historical performance
Index 1M 3M 6M 1Y YTD
BET 4.6 5.1 3.5 15.3 3.2
BET-TR 4.6 5.1 n.a n.a 3.2
BETPlus 4.3 4.3 2.8 n.a 2.7
BET-FI 6.1 -1.8 2.7 0.2 3.2
Index 1M 3M 6M 1Y YTD
BET EUR 6.0 4.5 3.0 15.7 4.0
BET-TR EUR 6.0 4.5 n.a n.a 4.0
BETPlus EUR 5.7 3.7 2.3 n.a 3.5
BET-FI EUR 7.5 -2.4 2.2 0.6 3.9 End of day values as of: 18 Feb
2015, 18.00 local time.
6000
6500
7000
7500
8000
26000
28000
30000
32000
34000
18-Feb-159-Dec-146-Oct-14
BET FI (rhs)
BET
6400
6600
6800
7000
7200
7400
-
20
40
60
80
100
120
18-Feb11-Feb4-Feb28-Jan21-Jan
RON mn
BET dynamics and BSE trading volume (rhs, bars)
Daily news on capital markets Petrom (SNP RO): 4Q net loss of
RON 304 mn - negative Net loss on lower than expected E&P
result and higher special items. Special items of almost RON 1 bn
or EUR 220 mn, included, in addition to the announced impairment
for Brazi power plant of EUR 140 mn,
some RON 164 mn special items for E&P related to an
impairment in Kazakhstan and some special items for R&M of RON
63 mn. CCS effect from inventory revaluation of RON 558 mn hit the
R&M result but part of the loss was eliminated through
consolidation. E&P results was below our figures, on a weaker
than expected crude production, in favour of gas, while OPEX was
also above estimates. R&M and G&P clean results were in
line with expectations. Overall, we expect a negative reaction to
the results. Most of the difference to our estimates comes from
one-offs, therefore we keep for the
moment our TP and Reduce recommendation. Iuliana Mocanu +40 21
306 1202 [email protected] OMV Petrom (SNP RO):
Media reports on second gas discovery in the Black Sea positive
(zf.ro) According to media reports, Petrom and Exxon might have
discovered a second gas accumulation in the Neptun Block in the
Black Sea of
about 20-25 bcm. Petrom and Exxon refuted the estimate. This
discovery would be the result of drilling the Pelican South-1 well,
started in October 2014. This was the third well drilled in the
Neptun
Block, on a separate prospect than the one related to the first
discovery (Domino-1 and Domino-2 wells). Although the company did
not confirm the discovery, we believe that the news might trigger a
positive reaction. Iuliana Mocanu +40 21 306 1202
[email protected] Romgaz (SNG RO): Net profit 17%
below expectations - negative Net profit came below expectations on
lower than estimated deliveries of own gas. These were some 11%
lower than expected and 16%
lower yoy On the costs side, the surprising item were salaries,
which jumped in 4Q, while other costs, including taxes were below
our figures. FY net profit reached RON 1.4 bn, up 44% yoy. Assuming
a 75% pay-out, the DPS could reach RON 2.8, offering a DY of 8.2%.
Though the results were a bit below expectations, we expect the
negative reaction would be minor. Iuliana Mocanu +40 21 306 1202
[email protected]
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Mutual Funds managed by Raiffeisen Asset Management
Year on year
(yoy)
Year to date
(ytd)
Raiffeisen Benefit Jun 2006 38.80 152.7322 8.7 2.9Raiffeisen
Romania Actiuni Aug 2007 19.56 42.4946 8.6 3.9Raiffeisen Confort
Sep 2007 228.78 159.1174 6.3 1.6Raiffeisen RonPlus Sep 2008
2,411.53 169.2384 5.9 1.0Raiffeisen RonFlexi Jun 2011 754.69
121.2223 4.3 0.6Raiffeisen EuroPlus (in EUR) Oct 2009 456.66
123.9093 5.3 0.8Raiffeisen DolarPlus (in USD) Oct 2010 88.24
1159.4505 4.6 0.6Raiffeisen Confort Euro (in EUR) Oct 2013 32.55
28.5342 6.3 2.1
* EUR mn for Raiffeisen EuroPlus and Confort Euro, and USD mn
for Raiffeisen DolarPlus NAV as of: 17 Feb 2015For further details
please visit www.raiffeisenfonduri.ro
Net Asset Value per
unit (NAV)
Assets under
management
(RON mn)*
Inception
month
Performance (%)
37
38
39
40
41
42
43
44
17-Feb-1517-Dec-1417-Oct-1421-Aug-14
Raiffeisen RO Actiuni (rhs)
140
144
148
152
156
160
164
17-Feb-1517-Dec-1417-Oct-1421-Aug-14
Raiffeisen Confort
Raiffeisen Benefit
160
163
166
169
172
175
115
117
119
121
123
125
17-Feb-1517-Dec-1417-Oct-1421-Aug-14
Raiffeisen Ron Flexi (rhs)
Raiffeisen RonPlus
115
117
119
121
123
125
1100
1120
1140
1160
1180
1200
17-Feb-1517-Dec-1417-Oct-1421-Aug-14
Raiffeisen DolarPlus (rhs)
Raiffeisen EuroPlus
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Raiffeisen RESEARCH Romania
Research team:
Ionut Dumitru Chief Economist, +40-21-306-1269 Nicolae Covrig
Financial Analyst, +40-21-306-1262 Gabriel Bobeica - Financial
Analyst, +40-21-306-1369 Anca Jelea - Financial Analyst,
+40-21-306-1265
Released on: 19 February 2015
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