The resumption of share trading for companies from the Rompetrol group has translated into a significant rise in quotes, with the increase spreading to other issuers involved in the petroleum business.
Yesterday, Rompetrol Rafinare Constanta (RRC) increased its share price by 14.3%, Rompetrol Well Services (PTR) by 14.7% and Rompetrol Bucuresti (VEGA) by 24.8% - the highest increase allowed by the listed market segment. The trend emerged after coming close to the maximum fluctuation limit allowed on Monday prior to the suspension. RRC gained 30% in the last two days.
The Brokers Association requested the National Securities Commission (CNVM) to look into all transactions conducted with Rompetrol Rafinare Constanta shares on Monday. The Brokers Association states that the Bucharest Stock Exchange was notified of the transaction long after the session closed and therefore allowed the information to be published, failing to insure investor protection. The surprise deal altered the expectations of the investors on the market, and made analysts change their assessments of the listed companies in the Rompetrol Group. Other petroleum companies that witnessed an increase yesterday include Oil Terminal (OIL), Conpet (COTE) and Energopetrol (ENP), which grew by the maximum level allowed under market regulations.
"I was surprised by the multiples at which the transaction to sell the group was conducted. They are much higher than those at which Romanian companies in this field are trading. The high price can either be explained by KazMunayGaz's intention to enter the European market, or by the possibility to integrate the operations of the two companies in order to gain a higher net profit," says a capital market analyst for Romania.
Brokers continue to expect upward trends from the issuers that are connected to the petroleum sector, at least in the short-term. Rompetrol Rafinare Constanta witnessed a low volume of trade yesterday, due to the lack of supply on the market.
In addition, the shares of Rompetrol Well Services, the service division of the group registered the highest traded volume on the market and 10.3% of the company changed hands at the maximum allowed price. Brokers believe Rompetrol Rafinare Constanta shares will continue to increase at a continuous rate, while the other two companies in the group will only post moderate increases.
"The refinery is still trading at a low price. It is undervalued, given that the main commodity they are trading on the stock market is expectations. A quick evaluation would reveal that a fair price for RRC shares would be 0.17 RON/share," says Adrian Danciu, analyst with financial investment service company Broker Cluj.
The last transaction to involve the company's shares was closed at 0.128 RON/share yesterday. Raiffeisen analysts, who published a report at the end of last week and rated Rompetrol Rafinare shares as "sell", have in turn reconsidered their assessments and will publish a new target price, higher than the level at which the company's shares closed yesterday, sources believe.
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