Foreign funds in June increased their stakes in Fondul Proprietatea by 0.78% after buying more than 47.5 million lei (EUR10.5 million) worth in net amount on the market, therefore coming to own 50.1% in the fund together. In all, about EUR36 million worth of Fondul Proprietatea shares were traded on the market in June.
Its largest shareholder, investment vehicle Manchester Securities controlled by US hedge fund Elliott, started buying again at the end of last week, probably attracted by the significant correction in recent weeks. Fondul Proprietatea shares lost 7.2% in June, more than the market, as the BET index lost 0.9%.
Elliott, which owns 13% in Fondul Proprietatea, bought 386,500 shares in the fund on Thursday, following transactions of RON178,000. This might be a sign that foreign investors have recovered from the shock of the insolvency of Hidroelectrica, Romania’s cheapest power producer, and are beginning to find Fondul Proprietatea attractive again. The fund owns 20% in Hidroelectrica, which is one of its most valuable assets.
On June 19, Fondul Proprietatea lost 5.12% on the stock market as a result of the announcement of its manager, Franklin Templeton, that the insolvency of Hidroelectrica would drive the value of the fund’s assets down by RON3.28 billion. Soon after the announcement, Elliott’s fund sold 709,400 shares for RON0.4713 each. Last week it decided to buy again and did it at RON0.46.
(English version by Loredana Fratila-Cristescu)