Both Conpet’s value and liquidity have improved after the company was transferred on the main market of the Bourse in 2013 and mostly after Fondul Proprietatea (FP) sold, back in 2014, a 23% stake in the company.
Conpet’s daily average liquidity increased 18-times during the last eight months compared with the same period in 2014, at RON226,127, while the average traded volume was up 14-times, at 3,600 shares.
Conpet posted a record-high profit of RON51 million in 2014 and paid a large amount of dividends, which encouraged investors to buy shares.
Conpet is part of the wider BET-XT, of the most liquid 25 companies on the Bourse, but the every company’s target is to get a position in the BET index, which the largest investors focus on. BET index is summarizing the trend of the most liquid 10 companies on the Bourse, the so-called blue-chips. In order to join this exclusive club on the Bourse, every “candidate” share is evaluated according to the liquidity coefficient, an indicator summing up the share of the transactions in the total liquidity of the main market during the last month, the last quarter, semester and year.
Conpet has a liquidity coefficient of 0.009, according to ZF data based on the transactions developed between September 2014 and August 2015. By comparison, the two companies with the lowest liquidity of the BET index, namely Nuclearelectrica (SNN.RO) and the Bucharest Stock Exchange (BVB.RO), have a coefficient of 0.011 and 0.007, according to ZF. Banca Transilvania (TLV.RO), whose shares are the most popular on the Bourse, has a liquidity coefficient of 0.13.
The evaluation for adjusting the indices takes place twice a year, in March and September, respectively. In early September’s session, the Bourse’s Indices Commission decided to leave BET index unchanged, but modified BET-XT and BET-BK indices, including the newly transferred Albalact (ALBZ.RO) and IAR (IARV.RO). Conpet’s shares would have boosted once again if they had been included in the BET index. Conpet has become one of the largest and most liquid companies on the Bourse over the past two years.
Indices Commission could decide whether a company is included in BET index even if the company meets part of the conditions, including the financial status, transparency and quality of reports. It is less probable the BVB excluded from BET index, the fight for a position in BET being between Conpet and Nuclearelectrica.
The average trading value of Nuclearelectrica almost halved in 2015 compared with a year before, at RON378,328, while the daily average traded value decreased 40%, at 50,375 shares, according to ZF calculation based on the data compiled in the first eight months in 2014 and 2015.
Though Nuclearelectrica announced weak results over the past two years due to low price and power demand, this could change in the future and the company may improve its margins. In exchange, Conpet’s perspective is less clear. The company is blocked between the country’s borders (as the oil pipeline network is not interconnected to the neighboring countries) and the clients’ database is very limited. Conpet is practically supplying oil to only two refineries countrywide, Petrom and Lukoil’s.
“Any benefits of better free-float are annulled by four-fold lower capitalization than Nuclearelectrica’s. In fact, Conpet’s share in BET index risks to be rather low, which would have a low influence of the company’s yield within the BET’s aggregate yield,“ pointed out Ovidiu Dumitrescu.
(English version by Manuela Panescu)