Government And Stock Exchange Investors Quarrel Over Proprietatea Fund Price

05.12.2011 ZF English

Fondul Proprietatea (FP.RO) shares lost 6.5% at the start of yesterday's session, after the ex dividend day, but recouped 4% towards the end, amid unofficial information that the government would not start to make compensation payments yet. Who will hold out more in this war of nerves?

The fund's shares suffered the biggest decline since floatation at the beginning of yesterday's session, losing 6.5%, and falling below the 0.5 lei (EUR0.12) threshold for the first time, after the last day when shares bore dividends passed. The fund therefore lost nearly RON500 million (EUR120 million) of its value in just a few minutes.

The decline in the opening of the session was greater than the value of the gross dividend distributed by the fund (the shares lost RON0.035, while the gross dividend per share is RON0.0314) and was deepened over the last two weeks by the pressure put by investors waiting for an over 10% stake in the fund to move from state's hands into those of holders of compensation certificates issued by the agency in charge of property restitution (ANRP).

This "threat", which saw the price fall by around 8% in the last two weeks alone, has so far proven baseless, with the Central Securities Depository announcing it has not received any conversion certificates (holders of compensation certificates can opt to receive shares instead of money) from the agency, which would allow it to transfer shares from the Finance Ministry to investors, although the process was resumed on May 2 in theory.