The fund is listed on the London stock exchange and had assets of 176 million pounds (EUR217 million) at the end of April, 5.1% (EUR11 million) of which are invested on the Bucharest stock exchange, according to a report published on the LSE.
Against the end of March, exposure to the Bucharest bourse doubled: Romanian stock at that moment weighed 2.5% in assets, equivalent with EUR5.1 million.
BRD stock is the fund’s largest investment on the Bucharest bourse, with a weight of 3.5% in assets. BlackRock strengthened its position in BRD’s shareholding structure in April considering the weight of the bank’s stock in the fund’s portfolio stood at 0.5% of assets in late March.
Thus, placements in BRD stock climbed to the eighth position among the fund’s largest investments aimed at frontier markets, such as the Bucharest bourse.
The significantly higher exposure to BRD stock, together with the doubled investments on the Bucharest bourse make a positive signal for the Romanian capital market. Other major foreign investment funds may also follow.
BRD stock did not have a good start to the year: it fell by 3.7% on the weak 2013 financial figures and share sales by SIFs. BRD reported a RON385 million loss in 2013, but 1Q data points to an improvement. The bank reported a profit of RON37.5 million owing to the significant decline in bad loan charges.
BlackRock’s biggest investments are on the stock exchanges of Qatar and the United Arab Emirates, which have been promoted to the league of emerging markets.
„The UAE and Qatar were strong during the month. Investors in Qatar and UAE have been eagerly anticipating the inclusion in the Emerging Markets index at the end of the month. However, we are less excited. We note that valuations in some UAE stocks are unusually high, and we are becoming increasingly concerned by the rapid rise in certain share prices. We much prefer the large number of Frontier Markets, where the macro-economic situation is robust or improving, companies are growing fast, and valuations are compelling. While no investment in Frontier Markets is without risk, we would highlight that Bangladesh, Romania, Saudi Arabia and Sri Lanka are looking particularly interesting at present,” reads the fund’s report.
(English version by Catalina Apostoiu)