Exerpt from Wood and Co research on Romania published 28/1/2016
We believe that the Fund should remain an attractive investment:
Fondul Propreitatea trades at 36% discount to NAV, with the stock price having fallen over 13% in the past six months, due mostly to the prices of Petrom and Romgaz (together accounting for 38% of the portfolio) having declined in line with the prices of oil and gas. According to our estimates, the declining oil and gas prices are already priced in for the two companies. Thus, we believe that the Fund should remain an attractive investment from the point of view of further upcoming corporate actions, such as the continuation of the buyback and an eventual acceleration, the payment of a special dividend (already approved, a 6.8% yield), the listing of Hidroelectrica (expected by the end of the year), and the potential sale of minority stakes in Electrica’s subsidiaries to Electrica’s mother company (announcement expected by the end of March).
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