Abstract
Last week we’ve received BRD’s financial results for the third quarter. The 687 million lei profit was easily to anticipate, given the relative constant activity and in line with our estimate. Mechel Targoviste confirmed their ambitious plans but only in terms of revenues, while the return lagged behind though at previously unattained levels. The results place the company in an undefined zone of our appreciations, and the company’s profitability as reflected by yearly reports becomes very important. Alro released the figures for 9 months, and the profit mounted to 376 million lei, a 42% increase as compared to September 2006, probably partially reflecting the comeback of aluminum prices internationally. Finally, Petrom had declining sales but a net results that topped our estimates dating back to May, this year, and is still encouraging the way it manages to reflect in profits the increase of oil price. PTR’s profit was a pleasant surprise last week, while the week before it was Transelectrica that surprised market with results way bellow expectations. Last week we also had the official announce concerning the ipo of Transgaz. The offer price, though situated in the upper side of an interval considered by us “justified”, is sufficiently low to allow the foreseeable success of the offer. However, the results of a more detailed analysis of Transgaz ipo will be published in our 23rd of November newsletter.
International markets were characterized by an extreme volatility last week, and the price of E-Trade (-59% on Tuesday, +41% Wednesday) could easily shadow the sometimes extreme behavior of XMBS market of BVB. The unoriginal theme for last week was the credit crunch crisis in US spiced with fears of more negative surprise related to companies’ loses due to subprime credit turmoil. If we add concerns regarding US’ economy we have the mixture that triggered the financial crisis months ago, which is likely to be present during 2008 as well.
The next period will be influenced by the debut of Transgaz ipo. We think that the last couple of weeks brought enough proofs of very good financial results; if we couple this with corrections we had lately, we must conclude that there are a few investments that could easily compete in attractiveness with Transagaz. The investment offer on BVB is still at a very low level, so that eventual price gains stemming from this scarcity could easily be confused with proofs of good financials. This is the reason why we will probably have to confront volatility above European averages, for a long period from now.
Last week
Last week BET and BET-C lost 2.43% and 2.51% respectively, while BET-C went down 2.42%. The average trading volume dropped 6% to 44.49 million lei daily, while the market capitalization decreased 2 percent to 81.304 billion lei.
BVB indices
| indices | Change | Nov 09, 2007 | Nov 16, 2007 |
| BET | -2.43% | 9321.43 | 9095.01 |
| BET-C | -2.51% | 6496.37 | 6333.12 |
| BET-FI | -2.42% | 73281 | 71509.76 |
BET (chart)
Top Price Gainers
The producer of environmental protection equipment, Comelf Bistrita, released the 3rd quarter results, showing a great progress. The company’s net income advanced 47.5% comparative to the one of the last year. The shares went up just 17.65%, as the price, we believe, had incorporated the management’s estimation regarding a strong advance of the business for this year.
OIL advanced more than 5% over the last five trading sessions, as the net income of the 3rd quarter positively surprised investors. The company obtained a result 11 times higher than the one of the last year. However, the financial performances weren’t determined by an increase of the company’s current operations, but by a strong diminution of the working expenses. Also, according to the OIL’s communique sent to the BSE, regarding the convocation notice of the shareholder’s meeting (18th of December), the agenda includes the proposal that the company should participate as shareholder in the multinational company that will develop Constanta –Trieste pipeline.
TOP 5 - PRICE GAINERS [RON]
| Symbol | Change | Nov 09, 2007 | Nov 16, 2007 |
| CMF | 17.65% | 5.1 | 6 |
| PPL | 11.86% | 3.71 | 4.15 |
| ZIM | 6.85% | 3.65 | 3.9 |
| OIL | 5.88% | 0.85 | 0.9 |
| AMO | 5.55% | 0.0757 | 0.0799 |
CMF (chart)
Top Price Losers
Artrom suffered the most serious correction last week (-20.03%). Apparently the 3rd quarter results showed a progress of the company, that is a net income 17% higher than the one of the last year. Despite the fact that the sales had an ascending trend since the beginning of the year, the company’s financial policy had a strong impact upon the net income. The net income of the 3rd quarter was lower than the one of the previously quarter, as the financial expenses went up in the last 3 months almost 170%.
Kandia-Excelent lost more than 16%, as the 3rd quarter results showed a net income 92% lower than the one of the last year. The weak result is due to the increase of the company’s expenses, as the ones with the most important weight were the expenses for the assets depreciation.
TOP 5 - PRICE LOSERS [RON]
| Symbol | Change | Nov 09, 2007 | Nov 16, 2007 |
| ART | -20.03% | 66.9 | 53.5 |
| EXC | -16.79% | 2.8 | 2.33 |
| BRK | -14.68% | 2.93 | 2.5 |
| ASA | -13.40% | 0.485 | 0.42 |
| UCM | -12.16% | 0.37 | 0.325 |
ART (chart)
Top Volume
The SIF’s and BRD were the most traded last week and compared to its total number of shares the most significant trades were conducted with SOCP’ shares, followed by AMO.
TOP 5 - TOTAL VOLUME [RON]
| Symbol | Volume |
| SIF5 | 33,727,864 |
| BRD | 33,093,805 |
| SIF2 | 28,846,430 |
| SIF1 | 19,893,794 |
| SIF4 | 17,006,973 |
TOP 5 - VOLUME (% of subscribed capital)
| Symbol | Volume / Number of Shares |
| SOCP | 3.26% |
| AMO | 2.20% |
| SIF2 | 1.73% |
| SIF5 | 1.46% |
| BRK | 1.28% |
This year, up until now...
Since thebeginning of the year BET and BET-C advanced 12.98 and 26.03 percent, respectively, while BET-FI is 13.49 percent higher than its level on 19th of December 2006. The SIFs and Banca Transilvania had the highest trading volume for this period. The trades with Altur Slatina, SIF Moldova, broker Cluj, SIF Oltenia and Siretul Pascani had the largest proportion in the companies’ capital.
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Copyright: 2006 SSIF Confident Invest Bucuresti SA. All rights reserved.
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Phone: +40 21 320 21 02, fax: +40 21 320 21 03, e-mail: research@confidentinvest.ro, web site: http://www.confidentinvest.ro
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Weekly Update Nov 16 2007.pdf, 130 Kb
