Danube Tiger heavily exposed to Romania

Regional investment fund Danube Tiger, managed by Austrian Hyposwiss Group, at the end of last year had come to an exposure of above 20 million euros to Romanian bonds and shares, which accounted for over 20% of its total assets, the fund’s 2003 report shows.

The total assets of the fund, specially raised to invest in Austria and Romania, amounted to 106.58 million euros at the end of 2003.

The value of Danube Tiger’s exposure to Romanian securities is surprisingly high, as the fund entered the Romanian market as late as the spring of 2003.

From that moment on, Danube Tiger has been aggressively buying bonds of Petrom, CFR Marfa and Romania (issued by the Finance Ministry) and has become shareholder in Petrom, Banca Transilvania and other Romanian companies.

The report highlights only the major exposures, so that Danube Tiger’s investments in Romania may be even larger. For instance, Danube Tiger bought some 10% in Romanian automotive parts maker Compa Sibiu for $600,000 last summer.

The Compa stake is not recorded in the fund’s report, as it is too small. Sources on the market say the fund has also invested in Banca Romana pentru Dezvoltare (Romanian Development Bank – BRD) or drug maker Sicomed Bucharest shares. At the same time, Danube Tiger bought bonds issued by Romanian municipalities last year, the same sources said. The fund’s highest exposures to Romanian securities are SNP Petrom’s, CFR Marfa’s and Romania’s bonds, which bear a high interest for country risk reasons. Danube Tiger’s investments in these bonds were worth some 15 million euros at the end of 2003.

Most of the investments on the Bucharest Stock Exchange were directed to liquid shares, such as SNP Petrom and Banca Transilvania

Danube Tiger has bought Banca Transilvania shares since last spring or summer, with the shares of the bank rising by approximately 50% in the meantime.

The fund operates on the Romanian capital market through Raiffeisen Capital & Investment (RCI) brokerage firm, part of Austria’s Raiffeisen Group, primarily. RCI introduced other regional funds besides Danube Tiger on the Romanian market last year.

Danube Tiger was raised in 2002 to take advantage of the increase experienced by stock markets across the Central and Eastern Europe (Austria and Romania mainly) and of the high yield provided by bonds issued by the companies or countries in the region.

The annual yield the fund set out to provide to its investors is 5-10%, which is quite high, if looking at the low banking interest rates. An annual euro deposit yields a 2% interest at the moment.
laurentiu.ispir@zf.ro