The fund has been buying back 97.8 million lei (EUR23.1 million) worth of its own shares, accounting for 1.3% in its share capital since May. The largest part of this sum, namely RON44 million (EUR10.4 million), was spent in the past two weeks amid the Greek debt crisis, when the fund bought aggressively to halt a dramatic share correction.
Though the purpose announced by Fondul Proprietatea’s manager
Franklin Templeton was to support the share price, repurchases did
not manage to halt the steep decline shares have been witnessed
since the fund was listed on the bourse. Since May 11, when the
fund operated the first repurchase, until now, its shares have lost
3.7% of their value.
“The fund is almost out of bullets, but there are still no
indications its shares have exited the downward trend. To a certain
extent, we can say repurchases have achieved their target as they
eased pressure on part of the market,” said Mihai Chisu, a broker
with IFB Finwest.
“Had there been no repurchases, the shares accounting for 1.3% in the capital could have ended up in the hands of some investors interested in selling them at an even lower price, therefore dragging the price even further down,” Chisu added.
Fondul Proprietatea shares were trading for RON0.512 (EUR0.12) yesterday, down about 1%. Calculated at this price, the fund’s market capitalization stood at RON7.095 billion (EUR1.68 billion). (EUR1=RON4.2246)
(English version by Catalina Apostoiu, Editing by Loredana Fratila-Cristescu)