Wood&Company, one of the leading brokerage firms in CzechRepublic has listed a warrant-type derivative product on the ViennaStock Exchange with the shares of the Property Fund (FondulProprietatea) as underlying asset. This provides the first officialquotes for the fund's shares, while the Romanian authorities havebeen procrastinating floatation of the fund on the Bucharest StockExchange (BSE) for three years now.
A warrant has 500,000 Property Fund shares as underlying assetand was trading for 36,300 euros on Tuesday, therefore the priceper share stands at 0.3 RON (1 RON is the par value), 15-20% higherthan the prices at which they were sold and bought at the end oflast year, 0.25-0.26 RON/share. At this price, the fund, which has3,200 shareholders, is valued at more than one billion euros, giventhat it holds assets worth about 2.8 billion euros.
The buyer of the derivatives does not actually own the shares,which are still held by the issuer (Wood&Company in this case),but the price of the certificates reflects the price of theProperty Fund shares, the same as CFDs do.
The structured product issued by Wood&Co is the first toprovide a public, official and transparent price of a Property Fundshare, considering the fund's shares have selling via classifiedads or through brokers in Romania for almost two years. Thesetransactions are hardly transparent, are unregulated andunsupervised by any authority and are registered with the CentralDepository together with the property transfer later.
"This product gives access to Romania to those investors thatnormally do not have access to the Romanian market or the PropertyFund," Bernhard Eiwan, managing director of Wood&Company toldZiarul Financiar.
On the other hand, those who own shares in the Property Fundwill have to wait for the floatation of the fund if they want tosell transparently, but at least they have an indication as to whatthe price might be.
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