The latest statements from Franklin Templeton officials on the possibility of buying back shares reveal how much is at stake when it comes to the price at which Fondul Proprietatea shares will be traded on the Bucharest Stock Exchange. Who will stand to gain if this option is activated: former owners, investment funds, speculators or the Romanian state?
The buying back of shares shortly after the listing could be a
gift to speculators, who have bought shares at much lower prices
than the nominal value in the last couple of years, although
Franklin Templeton says its prime concern lies with those who
received shares in compensation for properties confiscated by the
communist regime, and with the state, which will have to resume the
compensation process next year, using the Stock Exchange average
price of shares as a reference. A higher share price would lessen
the state’s compensation effort.
The FP manager is willing to use the around 200 million-euro
liquidity that the fund has available to buy Stock Exchange shares
from the investors that want out, thus reducing its investment
resources. The shares bought back can be deleted, in which case the
fund loses money, or can be sold later as part of a public
offering, in which case the Fund can stand to gain if it sells at a
higher price.
Franklin Templeton did not specify, however, which price would be
considered good and at which price it would start the buy-back
operation.