Foreign investments of EUR 750 mln in Romania’s Fondul Proprietatea since stock exchange listing

Foreigners have invested over EUR 750 million in Romania’s Fondul Proprietatea shares in the two years since the fund was listed on the Bucharest Stock Exchange, “which represents the largest foreign investment ever attracted to the Romanian capital market,” according to Greg Konieczny (in picture), Fund Manager of Fondul Proprietatea. Foreigners are the largest individual shareholders in the fund, with Elliott Associates holding 14.95 percent in FP, while City of London Investment Management holds 9.69 percent and The Royal Bank of Scotland, 5.39 percent.

The FP share price increased by 38 percent in 2012, while the Net Asset Value (NAV) increased by almost 9 percent. “Furthermore, in January 2013 the share price adjusted for dividends is at an all-time high,” said Konieczny at the two-year anniversary of the fund’s listing.

“When we started managing the Fund two years ago we immediately began focusing on transforming the way state-owned companies are run. This process has not been without challenges, but we have made great strides in bringing public attention to important topics such as corporate governance, privatizations through the stock exchange and professional management,” the fund manager went on.

The success of the Fund depends to a large extent, however, on the reform of state-owned companies. Franklin Templeton, the fund management company for Fondul Proprietatea expressed disappointment at the lack of progress in implementing the stock exchange listings program and the professional management and independent boards for state-owned companies, most of which are in the fund’s portfolio as well.

With 9,363 shareholders, the fund had 6.4 billion of its shares traded in 2012, and an average daily turnover of EUR 3 million. The value of the traded shares was of EUR 768 million. The average daily turnover was more than three times higher than the second placed, blue chip BRD.

The fund’s largest assets in portfolio are OMV Petrom, which is listed. The second largest, Hidroelectrica, is currently insolvent, while the third, Romgaz, is due for IPO in 2013. CE Oltenia and Nuclearelectrica are also due for IPO or sale in 2013. The fund’s top ten portfolio holdings have a value of some EUR 2 billion.

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(photo source: Fondul Proprietatea)


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