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Nov 21, 2007 18:57 EEST
BELGRADE (Serbia), November 21 (SeeNews) – Shares in Serbia’s top insurer Dunav Osiguranje lost more than 8.0% on Wednesday, affected by low investor interest in the sale of the country’s second-largest insurer DDOR, brokers said.
Italy's Fondaria submitted the sole bid in the tender for the sale of 83.3% of DDOR by the deadline on Monday. Serbian government officials said they will decide in five days' time whether to cancel the tender or launch negotiations with the sole bidder.
“Eleven have shown interest but only one has submitted an offer, which probably indicates that at the moment insurance is not as attractive as they [the government] have expected,” the head of Beo Monet brokerage, Zoran Grubacic, told SeeNews.
“Of course, this has an impact not only on DDOR but on the other insurers that are on the bourse,” Uros Spasenovic, a broker with Belgrade Independent brokerage, told SeeNews. “Dunav Osiguranje will surely fall, regardless of the fact that it’s an even bigger insurance company.”
Shares in Dunav Osiguranje recorded one of the biggest falls on the Belgrade Stock Exchange (BELEX) on Wednesday, closing 8.47% lower at 9,153 dinars ($169/114 euro). The stock fell 5.21% on Tuesday.
“As far as Dunav Osiguranje is concerned, we can expect a further fall,” Spasenovic said.
“There has been speculation about a price offer of 184 million euro ($272 million) [in the DDOR tender] but there’s no official information yet,” Grubacic said, adding that expectations put the price of the majority stake at some 500 million euro or higher.
“Many say the price is low,” Spasenovic said. “It is possible that there had been greater expectations but if you take the financial results of the company, this price according to me, is not that low. I won’t be surprised if the state accepts it. It is possible that they can extract another couple of million, or 10, or 20 and accept that price, which is not bad at all.”
Last year DDOR’s net profit soared to 732.2 million dinars from 79.8 million dinars in 2005. Its 2006 revenue rose 27.8% to 15.1 billion dinars.
(1 euro = 80.133 Serbian dinars)
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