How much is Petrom really worth, and what value is hidden in the stock portfolios of the financial investment companies (SIFs)? Every day of the week sees investors on the Bucharest Stock Exchange speculating on answers to these questions. But how many ever wondered just how much the Stock Exchange itself is worth?
According to a recently drafted evaluation report by PricewaterhouseCoopers, the Bucharest Stock Exchange is worth some 16 million euros, market sources told Ziarul Financiar. The report was commissioned by the capital market, which intends to change its legal status from an association to a joint-stock company, an intermediary step towards an eventual merger with the RASDAQ Electronic Market. The document is to be presented to brokers, current members and future shareholders of the Bucharest Stock Exchange.
As part of the process of transforming the Stock Exchange into a joint-stock company, each of the 71 brokerages that are members of the Stock Exchange will receive stock with a value of some 225,000 euros.
At present, the capital market’s main assets are made up of the cash accumulated over the past few years (now invested in T-bills) and the IT systems used for the daily trading sessions.
The evaluation report was conducted in line with the market value criterion, meaning that the Stock Exchange is actually worth 13 million euros more than its assets, which amounted to three million euros at the end of last year.
Beside tangible assets, the Stock Exchange also owns the brand it has been promoting aggressively over recent years and the copyright to market indexes, since both the logo and the indexes have been registered at the State Office for Inventions and Brands (OSIM).
The value attributed to the Stock Exchange by its evaluators is close to the market capitalisation the Bucharest Stock Exchange would have if the stock were to be listed. For most listed companies, the ratio of the stock price to last year’s profit per share is around 10. The same is true of the Bucharest Stock Exchange, which last year had surpluses (profit equivalents for the associations) worth 1.5 million euros.
The total capitalisation of the Stock Exchange is now worth 5.3 billion euros, up 2.3 billion euros from the beginning of the year. This surge in capitalisation was fuelled by an average growth in prices of 50%, together with the Rompetrol Rafinare listing.
Compared to last year, the value of transactions has shown much stronger dynamics than has market capitalisation. Transactions conducted on the Stock Exchange were this year worth 394 million dollars, joined by bond transactions of 55 million euros.
The Bucharest Stock Exchange last year recorded total revenues worth 2.8 million euros, derived mainly from trading fees and from the interest rates collected for the cash in the accounts.
The merger between the Stock Exchange and RASADQ will most likely be completed next year, leading to the emergence of a market with more than seven billion dollars in capitalisation and several hundred listed companies.
vlad.nicolaescu@zf.ro