Their main placements in Romania are in Romgaz, BRD, Banca Transilvania, Petrom, Proprietatea Fund and Electrica stock. BVB’s upgrading to the league of emerging markets is likely to prompt the biggest money managers to enhance their local presence, now kept low because of BVB’s frontier market status.
The Romanian stocks part of the four funds’ portfolios are worth $107 million, according with ZF calculations based on the latest information published by the managers.
The sum is small compared with the assets held by these managers, but also against the local capital market: Romanian pension funds have bigger placements on the Bucharest bourse.
BlackRock is present locally through two investment funds-Emerging Europe and Frontier Trust. The biggest local investments of the two funds are BRD SocGen stock. The two funds hold BRD stock worth $17 million (RON68 million), in the context where the bank’s capitalization amounts to $1.7 billion. Romgaz stock is the second local placement, worth $7 million.
US group Vanguard invested in energy distribution group Electrica. Vanguard did not directly invest in stock, but in stock-based GDRs with a total value of around $330,000 in October 31, 2014.
The funds managed by US group Franklin Templeton have some of the biggest local placements. In October 31, 2014, the local stock part of the portfolio of two funds managed by Franklin Templeton stood at around $64 million. The two funds’ main investments were Petrom, Banca Transilvania, BRD SocGen and Romgaz stock.
The funds managed by US company Morgan Stanely have placements in Romanian stock worth around $20 million.
The local market’s main attractions for foreign investment funds are the appealing valuation of Romanian companies listed on the bourse doubled by the lavish dividends they award investors.
Moreover, the Bucharest bourse is among the world’s most undervalued: companies part of BET index have a PER indicator of around 7, a sign investors recoup the money invested in this index in around seven years.
Upgrading to the league of emerging markets is likely to bring capital flows worth above EUR1 billion onto the local market and daily stock trades may double to over EUR20 million.
(English version by Catalina Apostoiu)