Fondul Proprietatea, three years since its listing on BVB


Since the listing on the Bucharest Stock Exchange (BVB), the Fondul Proprietatea (Proprietatea Fund – FP) has attracted over EUR 1.2 billion in direct portfolio investments from foreign institutional investors, many of them investing for the first time in the country, Mark Mobius, Executive Chairman of Templeton Emerging Markets Group, commented in a press conference yesterday. It also diversified the shareholder base, the shareholding of institutional investors in the Fund increasing from 10 per cent (December 2010) to over 63 per cent (December 2013). Since listing the share price reached a high record of RON 0.8605 in December 2013 and thus increased by 56.6 per cent compared to 31 December 2012 and 32.5 per cent compared to the first listing day. During this time, the Fund was the most traded share on the BVB, with average value of trades amounting to over 50 per cent of the total turnover of the BVB. The Fund concluded two buy-back programmes, acquiring 1,341.25 million shares in total (equivalent to 10 per cent of the Fund’s paid share capital) through daily acquisitions on the BVB and a tender offer of 600 million shares (4.5 per cent of the Fund’s paid share capital). The total value of the two buy-backs programmes, excluding acquisition costs, amounted to RON 1.08 billion. Looking forward to the Fund’s fourth year on the stock exchange, Greg Konieczny, Fund Manager of FP, added: “We expect that 2014 will be another exciting year in terms of privatizations, as we expect to see some major companies in our portfolio being listed on the stock exchange. This should have the two-fold advantage of making our portfolio more liquid and transparent, in addition to supporting the development of the capital market.”
Romanian capital market, among the most expensive
Attending the event, the US charge d’affaires to Romania, Duane Butcher said that the access to the Romanian capital market remains difficult. Moreover, the American diplomat added that the Romanian capital market is among the most expensive in the region, because of commissions charged by BVB and the Financial Supervisory Authority (ASF). The high commissions charged by ASF were also tackled by the International Monetary Fund and the latest letter of intent expressly sets the obligation of the institution to transparently make public all its costs and bring commissions to reasonable levels, in line with international practices. The US charge d’affaires added that the capital market alone cannot generate economic growth and Romania needs private investments, both domestic and foreign direct investments.

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