The Net Asset Value per share of SIF according to the portfolios released for 30 July 2008
1. Introduction
Important events*
Between July 17 and August 25 2008, SIF Banat Crisana (SIF1) subscribed RON 54.8 Mn within three share capital increases run by three companies. Thus, SIF1 subscribed RON 14.40 Mn within SC Central SA Petrosani share capital increase, RON 3.9 Mn within Complex Laboratoare Cluj and RON 36.5 Mn within Calipso Oradea share capital increase.
On July 28, 2008, Comcm Constanta, construction company, acquired 286,900 SIF Transilvania (SIF3) shares, worth RON 0.27 Mn. SIF3 owns a stake of 56.40% in Comcereal Constanta.
On July 23, SIF Muntenia(SIF4) sold 54,027 Erste Bank shares on Vienna Stock exchange worth EUR 2.187 Mn, for a price of EUR 40.5, recording a gross profit from selling them of cEUR 0.22 Mn in only 7 days.
On 22 July, SIF Oltenia (SIF5) bought 100,000 shares in BRDGSG (BRD) worth RON 1.8 Mn. Also, SIF Oltenia Board of Directors called for an Ordinary SGA on 28-39 August in order to decide if it is appropriate to keep Mr Dinel Staicu as its president. Oltenia Leasing bought 200,000 shares in SIF5 through two trades of 100,000 shares each, at a price of RON 1.6 and RON 1.71 respectively.
On 17 July, NSC made public the decision regarding the fact that financial investment companies are not obliged to release consolidated financial statements.
SIF1/ SIF2/ SIF3/ SIF4/ SIF5 (table)
* The events presented in this section are reffering to the period for which the financial investments companies’ (SIFs) portfolios were released, as well as to the period followed it. The events happened after the publicatione of the portfolios will have an impact to the data regarding the next month portfolios’ held by SIFs.
2. Key Financial Indicators
The net assets value of the five SIFs reached RON 9.61 Bn at the end of July08, down 12.35% YOY. At the end of July, SIF Transilvania (SIF3) recorded the highest net asset value among the five SIFs, namely RON 2.34 Bn (down 5.39%YOY), while the lowest one was registered by SIF Moldova (SIF2) namely RON 1.47 Bn (down 15.74% YOY). In the first seven months of 2008, the cumulated net profit of the five SIFs accounted for RON 360.43 Mn, down 7.84%YOY. SIF Moldova (SIF2) posted the highest yearly growth of the 7M08 net profit among all five SIFs, namely 49.95% YOY, up to RON 73.14 Mn. The highest decline of the 7M08 profit was registered by SIF Oltenia (SIF5), namely 42.78%YOY, up to RON 58.75 Mn. SIF Banat Crisana (SIF1) posted the highest net profit among the SIFs in July08, namely RON 29.7, while SIF Transilvania (SIF3) posted a loss of RON 1.86 Mn.
However, the only SIF that is traded on premium in terms of PERe’08 is SIF5, while the other three SIFs are traded with discounts.
Key Financial Indicators (table)
3. The five SIFs share price evolution
Between July 21 and August 21, BET-FI dropped 16% to 31,000 points, after breaking the levels of 33,000 and 32,000 points, while BET lost only 2.82% and BET-C dropped 4.12%. On July 30 was posted the highest daily increase, when BET-FI went up to 35,000 points, while the highest daily loss was registered on July 22, when BET-FI was breaking the level of 36,000 points from 37,361.91 points value recorded a day before. In the last five trading sessions, the five SIFs accounted for 48.38% of the total turnover, being each day among the most traded issuers.
On July 21, the five financial investment companies shares posted the lowest levels in the last two years, SIF2 and SIF3 loosing almost 4%. In the same period, SIF3 posted a decrease of 62.88% YOY and 63.36% YTD, very close to SIF5 loss of 61.19% YOY and respectively 62.44% YTD. SIF5 posted the highest monthly loss, namely 17.95%, while SIF1 dropped only 4.46% in the same period.
SIFs share price evolution (table)
BET and BET-FI (YOY) (chart)
SIFs' price evolution (YOY) (chart)
4. The moderate NAV per share as of end-July 2008
Taking into consideration the diversity of investments made by the five SIFs, and that regulations in force regarding the methodology of determining the net assets does not show the real value of these investments, we consider that some adjustments to the official methodology have to be made, in order to bring the net assets as close to the real values as possible, but eliminating the possibility of overvaluing a category of assets.
In order to calculate the net asset value (NAV) of the five SIFs, their assets were divided into eight categories and adjustments were operated, taking into consideration the way the NSC Regulation no. 15/2004 values the respective instruments. The coefficients used in this scenario are presented in the table below:
Asset Category (table)
The value of the shares listed on the Bucharest Stock exchange was determined using the closing price of 21 August, not the weighted average price of the last 3 months, as calculated by the depositories according to the NSC Regulation no. 15/2004.
As compared to the official values calculated by the depository according to NSC Regulation no. 15/2004, we have operated only two adjustments for computing the NAV per share. Adjustment coefficients were operated to other closed companies, apart from BCR (category 6) and in listed but not traded companies, as well as unlisted but traded companies (category 7). As regards the value of the stakes held by the SIFs in BCR (category 5), these were valued according to the current P/BV at which is traded the peer group comprising of Eastern European banks adjusted with a premium as Romanian banks are traded currently at P/BV c1.39 times higher than their Eastern European peers. Thus, current P/BV of Eastern European banks is c 2.28, while for Romanian banks traded is c3.17, so for BCR we consider P/BV of c2.96, considering a premium of 30% as compared to its Eastern European peers for growth opportunities of South-Europe banks. However, we reach to a value of RON 14.32 Bn for BCR. We consider the above-mentioned methodology is a rather conservative valuation for BCR as BRD-GSG is trading currently at c3.64, but appropriate considering the current evolution of the banks on the markets.
The following table includes the eight categories of assets, after applying the above-mentioned adjustments to the official values reported by the SIFs for 31 July 2008.
Asset Category (table)
The table below contains the most recent official NAV per share calculated by depositories, the moderate NAV per share (resulted from the calculations according to the above-mentioned methodology) as of 21 August 2008 with the SIFs portfolios as of end-July, as well as the discounts at which the SIFs were traded on 21 August. As our methodology changed as compared to the last release report we will not present the previous discounts as they are not comparable.
Official NAV/share (table)
5. Conclusions
SIF Transilvania (SIF3) recorded the highest discount of the prices as of 21 August to recent calculated moderate NAV/share, namely 66.41%, followed by SIF Muntenia (SIF4) with 65.01% and SIF Oltenia (SIF5) with 63.80%.
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Copyright: 2006 SSIF IEBA TRUST SA. All rights reserved.
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Tel. +40 21 313 0102, fax: +40 21 313 1595, e-mail: research@iebatrust.ro, web site: http://www.iebatrust.ro
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Net Asset Value Share SIFs Aug 26 2008.pdf, 524 Kb
