News

Daily Newsletter - 30 November 2021

Summary

Macroeconomic (3)
Financial (3)
Investment (3)
Legislative (1)
European News (1)
Social (2)
Macroeconomic 
The Covid-19 pandemic narrowed the prosperity gap between rich and emerging countries last year
The Covid-19 pandemic narrowed the prosperity gap between rich and emerging countries last year, considering that countries with a strong economy were affected at the beginning of the pandemic, but its consequences could hit emerging markets harder on a medium and long term, according to an Euler Hermes analysis. Romania had been initially expected to make the transition towards the group of high average income countries in 2026 at the latest, but the crisis generated by Covid-19 has delayed the forecast by another year. Delays are also expected in Hungary, the new forecast being in 2027, compared to 2025 prior to the pandemic, but also in Latvia, from 2022 to 2025.
The negative dynamics of global trade accelerated in September
Global trade momentum accelerated its decline to 1.1% in September 2021, from 0.9% in the previous month, amid a 0.8% decrease recorded by advanced economies and a 1.8% fall at the level of emerging economies. The negative dynamics of the global trade momentum was significantly influenced by China, where the decline accelerated to 4.8%, from 4%. The annual increase in the volume of global trade was more moderate in September 2021, of 4.6%, from 8.2% in the previous month, amid a monthly decline of 0.8%, after a 0.7% advance in the previous month, according to the latest World Trade Monitor report, published by the Dutch institute CPB.
Long-term financing costs continue to grow and reach the highest level in eight years
The government’s financing costs have exploded this year, the ten-year interest rate (RO10Y), the barometer for the cost of financing in economy, having reached its highest level of the past eight years on Friday. The only time when the ten-year financing cost was higher in the last eight years was mid-March 2020, when the local secondary government securities market was blocked by the wild volatility on international financial markets and the National Bank of Romania (NBR) was forced to enter the market to make government securities purchases for the first time.
Financial 
NBR will put into circulation a polymer replica of the first RON 20 banknote
As of 1 December, the National Bank of Romania (NBR) will put into circulation, for numismatic purposes, a polymer replica of the first RON 20 banknote issued by the central bank in 1881. The selling price of the replica is RON 100, VAT not included, including the presentation leaflet. The banknote will be put into circulation through NBR’s regional branches in Bucharest, Cluj, Constanţa, Dolj, Iaşi and Timiş.
FGA will make first compensation payments to City Insurance’s prejudiced clients
The Insured Guarantee Fund (FGA) has announced that it will start the first compensation payments corresponding to the requests submitted by the clients prejudiced by City Insurance, a company whose operating license was withdrawn and which is currently on the verge of bankruptcy, starting from 29 November 2021, according to the information transmitted by FGA representatives. The institution will initially pay RON 2,342,424 for a number of 1,003 payment requests, according to the Financial Supervisory Authority (ASF). FGA had received 68,931 payment requests as well as 35,687 case opening requests by 26 November 2021.
The new bonds issued by Libra Internet Bank will start being traded on BSE on 3 December
The new bonds issued by Libra Internet Bank, worth EUR 40 million, will start being traded on Bucharest Stock Exchange (BSE) on 3 December, under the symbol LIBRA28E. Libra Internet Bank sold a number of 400 senior MREL eligible, nominative, dematerialized, unsecured and non-convertible, euro-denominated bonds within a private placement carried out this year, on 22-23 September and 11 November 11. The bonds have a nominal value of EUR 100,000, seven-year maturity, being due on 28 September 2028, and a fixed coupon rate of 4.25% per year.
Investment 
Prime Kapital will launch a new shopping center in Ploiești, called Prahova Value Center
Real estate investor and developer Prime Kapital will launch a new shopping center in Ploiești, called Prahova Value Center, but will also start construction works on Pleiades Residence, the residential component of the same urban regeneration project in the city, developed on the former industrial platform of 1 Mai plant. Value Center will host a large number of commercial spaces for all ages and interests, on a total built-up area of 25,200 square meters and will have over 800 parking spaces.
Nissan will invest EUR 15.6 billion to accelerate the electrification of its range of vehicles
Japanese automotive manufacturer Nissan Motor Co., Renault’s partner within the Renault-Nissan alliance, wants half of the vehicles sold at global level in 2030 to be electrified (battery-powered or hybrid) vehicles, compared to about 10% in 2020, Reuters reports. According to the company’s long-term strategy, entitled "Ambition 2030", presented by Nissan on Monday, the Japanese car maker will launch 23 new electrified vehicles by tax year 2030/2031, including 15 fully electric vehicles. Nissan thus intends to invest USD 2,000 billion.
One United Properties expects USD 10 million automatic investments following inclusion in FTSE indexes
Real estate developer One United Properties, founded by bankers Victor Căpitanu and Andrei Diaconescu, expects about EUR 10 million automatic investments from global funds that monitor the FTSE Russell indexes, a cash flow that will put pressure on the company’s share price. One United Properties (ONE) shares will enter the structure of the American-British rating agency FTSE Russell’s FTSE Global All Cap index starting from 20 December.
Legislative 
A USR senator submitted a draft law amending and completing the Traffic Code
A senator from Save Romania Union (USR) has submitted a draft law amending and completing the Traffic Code by introducing defensive driving and first aid courses both for persons who want to obtain a driver’s license and for those whose licenses have been suspended. According to some studies, Romania is still in the top of countries with the most road traffic accidents, and European Commission documents show that Romania has the highest number of road deaths, ranking first in the European Union in terms of fatality rate (85 deaths per 1 million inhabitants).
European News 
EU is stepping up efforts on soil health research through the new Horizon Europe mission
The European Union is stepping up efforts on soil health research with the announcement of a new Horizon Europe mission, which will also provide key funding for the promotion of carbon farming. The new €320 million Horizon Europe mission, announced at the end of September, aims to spur the transition to healthy soils by 2030, in line with Green Deal commitments for climate, biodiversity, zero pollution, and sustainable food systems. According to the European Commission, the programme aims to engage with people and create effective partnerships to protect and restore soils across sectors and territories.
Social 
15.2% of the population was severely materially deprived in 2020
The total number of people affected by severe material deprivation stood at 2.95 million in 2020, of whom 47.4% were men and 52.6% were women, the shares being close to the ones recorded in the previous year, according to data centralized by the National Institute of Statistics. The severe material deprivation rate decreased by 4.5% compared to 2017, having reached 15.2% of the population in 2020. Last year, the incidence of severe material deprivation was higher mainly in children up to the age of 18 (21.4%) and in young people aged 18-24 (17.7%). Moreover, significant decreases, of 6.8% and 6.4% respectively, were recorded in the shares of severely materially deprived persons in the 50-64 age group and in those aged 65 and over, in 2020, compared with 2017.
Minister of Education made several statements regarding the winter holiday
Minister of Education, Sorin Cîmpeanu has explained that the Covid-19 saliva tests for pupils and students will be distributed through each school’s internal organization system. The minister has also indicated that prolonging the winter break, amid the spreading of the Omicron variant of Covid-19, is currently out of the question.