ROMANIAN STOCK MARKET SENTIMENT REVIEW

MAY 2010

Data collection : 28.04– 30.04 2010

2

59,6

68,4

55,648,548,851,4

32,429,3

51,7

63,671,9

47,1

68,6

51,6

70,871,965,668,871,0

47,147,154,5

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

BETFI - Experts (6 months)

Bulls Neutral Bears ProEXBETFI6

Review

The Lucky Analyst

This will not be the first time we will hear, or overhear that analysts at Orpheus just got lucky. We got you the Mar 2009 low when the markets were reeling under negative contagion and we got you the top with the current ongoing fall in May 2010 and now if you say that we got lucky because of Greece or Dow or Dollar, you are still living that causal explanation that lacks predictive value. Behavioral finance puts luck as a hot hand fallacy. We can never get you 100% accuracy, but what we have proved over a year of studying sentiment readings through RSR and almost five years of alternative research at Orpheus, that markets are more predictable than they seem. You have to be able to understand extremes.

This is what we said on 16 April in our RSR feature on Rational extreme

“Extremes are never rational and buying at extremes need preparation and knowledge. Extremes by very nature are overstretched and irrational. Now if we look at Romanian markets, its not just RSR readings but classic conventional momentum that suggest extremes. Internet bloggers have already started getting vocal proving how wrong the experts are. Volatility indicators that are traditionally known to gauge fear are at all time lows across global equity regions. This all proves that we are living the time of rational extremes. Mar 2009 and Oct 2008 when we mentioned about reversal and potential buying opportunities, the majority was rationalizing negativity. Now the market participants are rationalizing positivity. Our best wishes are with the majority. What we see is a non confirming extreme on Advance Decline, Yale Hirsch negative cycle seasonality and all time extreme bullish readings on RSR across indices and time frames. Of the experts are not the bullish. But who cares about experts anyway? What does an expert know? The Confidence index at all-time max (40). We continue to look at a topping market despite market’s inability to reverse in March.”

This is a clear case of anticipated and happened. Markets move in a cyclical rhythm and mathematical order. And all the collapse of Euro, Greece Riots, Romanian state punishing the pensioners is an order that was predictable after the overhang of excesses made from 2000 till 2007. Few of our readers would understand that credit up cycles look exciting and down cycles very painful. Till we built back the character and value we lost in good times, the down cycle will pain and surprise. Emotional control now has to also learn to prepare for surprise. The best part of all this crisis, humility comes back, inefficiency separates from efficiency, new entry points emerge, learning increases and a small percentage of the market participants realize that waiting for the state to take care of your pensions is a bad idea and some analysts are not lucky, but objective. The market readings on RSR on 6 month basis continue to be high. BETFI 20,000 remains a distinct possibility. Trade safe and get ready for a life without Euro.

Mukul PalOrpheus Capitals, Global Alternative Research

3

1 month term expectations

28,4

30,9

18,2

23,2

59,4

33,0

15,1 19,0

60,7

78,3

50,0

33,3

71,4

66,7

32,7

22,9

55,9

81,2

59,752,8

76,9

31,3

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

BETFI - Investors (1 month)

Bulls Neutral Bears ProIIBETFI1

17,1

28,1

18,210,5

77,1

29,4

15,213,6

47,4

72,5

50,0

14,3

78,670,4

36,028,1

61,1

89,3

42,946,9

58,6

26,1

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

BETFI - Experts (1 month)

Bulls Neutral Bears ProEXBETFI1

4

1 month term expectations

17,4

24,8

17,5

26,0

50,8

28,8

14,5 16,2

61,4

73,5

47,1

33,3

70,667,3

31,5

19,1

51,9

73,6

42,246,8

76,6

25,0

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

BET - Investors (1 month)

Bulls Neutral Bears ProIIBET1

20,9

30,9

16,110,3

72,3

33,3

20,0

9,5

50,0

65,8

44,0

5,0

71,469,0

29,2

12,1

57,6

83,3

22,7

39,3

57,1

26,1

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

BET - Experts (1 month)

Bulls Neutral Bears ProEXBET1

5

1 month term expectations

40,5

33,0

20,4

23,9

44,3

28,8

14,8 21,1

51,3

74,6

43,1

30,0

63,666,7

47,9

18,6

44,4

69,1

45,341,2

82,1

38,2

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

RAQC - Investors (1 month)

Bulls Neutral Bears ProIIRAQ1

33,332,8

13,28,6

61,5

35,5

15,2

9,8

47,1

68,8

52,6

4,8

76,068,0

63,0

19,2

59,1

83,3

15,8

45,5

71,4

33,3

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

RAQC - Experts (1 month)

Bulls Neutral Bears ProEXRAQ1

6

6 months term expectations

75,8 69,7

57,157,1 62,058,6

42,1 48,8

52,9

65,857,5

62,468,9

56,161,7

50,0

61,9

72,770,768,071,463,5

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

BETFI - Investors (6 months)

Bulls Neutral Bears ProIIBETFI6

59,6

68,4

55,648,548,851,4

32,429,3

51,7

63,671,9

47,1

68,6

51,6

70,871,965,668,871,0

47,147,154,5

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

BETFI - Experts (6 months)

Bulls Neutral Bears ProEXBETFI6

7

6 months term expectations

77,4 69,5

59,159,4

60,0 61,0

49,248,6

52,4

65,261,258,0

64,458,259,3

49,258,1

69,471,672,770,663,5

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

BET- Investors (6 months)

Bulls Neutral Bears ProIIBET6

63,8

72,9

54,051,5

48,842,9

34,231,4

51,756,759,5

44,1

62,9

50,0

64,372,4

59,465,465,5

50,050,048,0

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

BET- Experts (6 months)

Bulls Neutral Bears ProEXBET6

8

6 months term expectations

76

67,7

53,2

56,7

50,846,8

31,444,9

45,5

66,2

51,447,9

56,753,857,9

45,854,2

67,763,3

71,770,8

59,6

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

RAQC - Investors (6 months)

Bulls Neutral Bears ProIIRAQ6

57,1

64,3

43,1

48,5 50,0

40,0

28,625,7

48,356,5

67,7

32,3

58,6

45,2

75,0

64,362,171,469,6

50,055,6

43,5

0

10

20

30

40

50

60

70

80

90

100

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

RAQC - Experts (6 months)

Bulls Neutral Bears ProEXRAQ6

9

8,5

19,5

40,2

31,7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jul 0

8

Aug Se

p

Oct

Nov

Dec

Jan

09

Feb

Mar

Apr

May Jun

Jul

Aug Se

p

Oct

Nov

Dec

Jan

10

Feb

Mar

Apr

-9,2

-33,0

-46,2-45,4

-16,2

-35,6

-63,4 -59,8

-3,3

10,3

-4,3

-28,6

14,4

1,23-2,5

-32,2

-7,0

26,0

8,214,9

40,2

-4,9

-80

-60

-40

-20

0

20

40

60

80

jul 08

aug sep oct nov dec jan 09

feb mar apr may jun jul aug sep oct nov dec jan 10

feb mar apr

Confi

denc

e In

dex

Investors Confidence

Romanian Sentiment Review

RSR este un indice de sentiment bazat pe sondajul participantilor la piata – Specialisti ai SSIFurilor si Investitori Individuali. Respondentii sunt chestionati lunar despre diverse aspecte legate de piata de capital printre care asteptarile cu privire la trendul indicilor bursieri pe diverse perioade de timp, increderea in atingerea propriilor obiective investitionale si preferintele sectoriale. Datele sunt apoi procesate si analizate pentru a crea indicii de sentiment. Interpretarea rezultatelor explica sentimentul pietei si directia acesteia. Periodic, distribuim datele de sentiment respondentilor nostri si institutiilor financiare, managerilor de fond si brokerilor pentrui research si decizii de investitii.

A Sentiment Index reading can assist to measure these extremities in mood and potential market turns. Survey respondents will not only benefit from the interpretation and indicator readings but also will be invited for regular training seminars on sentiment indicators and provided relevant literature. Orpheus Capitals and Prognosis.ro are two independent research companies publishing the Romanian Sentiment Review. RSR is a sentiment index based on the survey of market players. The respondents are queried on a host of areas including time frame of expectations, bullish and bearish bias and sectoral preferences. The data is then analyzed to create various sentiment indices. The readings of the various indices explains the market sentiment and market direction. We also furnish the sentiment data on a periodical basis to financial institutions, fund managers and brokers for further research and investment.

This document is not for public distribution and has been furnished to you solely for your information and may not be reproduced or redistributed to any other person. The manner of circulation and distribution of this document may be restricted by law. Persons into whose possession this document may come are required to inform themselves of, and to observe, such restrictions. This material is for the personal information of the authorized recipient, and we are not soliciting any action based upon it. This report is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. No person associated Orpheus CAPITALS and/or Prognosis.ro is obligated to call or initiate contact with you for the purposes of elaborating or following up on the information contained in this document. The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Neither Orpheus CAPITALS and/or Prognosis.ro is , nor any person connected with him, accepts any liability arising from the use of this document. The recipient of this material should rely on their own investigations and take their own professional advice. Opinions expressed are our current opinions as of the date appearing on this material only. While Orpheus CAPITALS and/or Prognosis.ro endeavor’s to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent him from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice. No part of this material may be duplicated in any form and/or redistributed without prior written consent. In so far as this report includes current or historical information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed.ROMANIAN STOCK MARKET SENTIMENT

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