Shares in financial investment companies (SIFs) continue to set new price records. Their rise was this time driven by the speculations on the price at which Banca Comerciala Romana, the leader of the Romanian banking system, will sell.
SIF shares gained more than 3% yesterday, with the buying pressure put on these shares pushing almost every seller to withdraw their orders during the session.
The most heavily traded of the SIFs were SIF Oltenia and Transilvania, each of them seeing over 2 million euros exchange hands. SIF Oltenia”s quote rose to a new all time high of 2.2 RON/share by yesterday”s close, an increase of more than 3% on the previous session. Along with yesterday”s increase, SIF Oltenia”s market value has come to exceed 355 million euros.
The SIFs together are now worth nearly 1.5 billon euros on the Bucharest Stock Exchange, 52 million euros more than at the end of last week.
Brokers say the trend witnessed by SIFs was given a boost yesterday by speculations on the market about there being an offer of at least 3 billion euros for the 62% in BCR, over which the seven banks still in the race for the privatisation of this bank are competing.
“There have been rumours on the market about offers for that majority stake in BCR of between 2.8-3.3 billion euros, which would result in the value of the bank standing at 4.5-5.3 billion euros,” commented Rares Nilas, the head of BT Securities brokerage firm. If BCR were worth 5.3 billion euros, the 6% stake held by each SIF would be worth 318 million euros, that is more than the market capitalisation of most SIFs at the moment. “Everybody is calculating how much the net asset of the SIFs is worth now in light of the price offered for BCR. Yet the big problem is that the net asset will only be influenced when BCR is traded on the Bucharest Stock Exchange and when trading is done at a suitable price. It is hard to say that the value given to BCR by the investor who buys the controlling interests will be the same at which the bank will begin being traded on the capital market. This is because the price paid at this time includes the premium, which comes with buying a majority stake,” Nilas explained.
Brokers say it is now hard to tell what the right price for SIFs is. “There is still room for growth for the SIF shares. However, it is very hard to establish what the right price for them is. Prices of 2 – 2.5 RON/share compared with the dividends SIFs are disbursing are not feasible. It will all be up to the future approach of the majority shareholder,” Rares Nilas suggested.
Some analysts believe that besides the speculations about BCR”s privatisation, the SIFs” growth is connected to the significant foreign capital being directed towards these shares. Now that the cap for the stake any investor may hold in a specific SIF has been raised to 1%, more and more foreign funds are buying into SIFs. Therefore, market sources say, whereas foreign investors held only 4 or 5% in SIF Oltenia in April, they came to own 8-9% in the company two weeks ago.
catalin.ciocan@zf.ro ; adrian.mirsanu@zf.ro