The market capitalisation of Petrom, Romania's most important company, overshoot the 8 billion-euro mark on the Bucharest Stock Exchange yesterday, leaving behind its main owner, Austrian OMV Group.
The interest of financial investors pushed the quote for the Romanian company to a record high of 5,250 ROL (0.14 euros) per share. Yesterday's trading amounted to 1.2 million euros, with 6.8 million shares changing hands.
The irony of this is that the difference between Petrom's market capitalisation and that of OMV is in region of 622 million euros, almost as much as the 33.34% stake in Petrom was worth that the Austrian company bought from the Romanian state last year.
Back then, the cost of one third in Petrom was 669 million euros. This is now worth 2.695bn euros on the Bucharest Stock Exchange (BSE), effectively netting the Austrian company more than 2bn euros only two months after taking over the company.
Petrom's quote is now four times higher than one year ago, since which time the European currency has lost a lot of ground against the ROL.
Brokers say the increase in Petrom's share price is primarily due to the foreign investors that keep spending on the capital market. They have to raise the price of the shares if they want to buy several million euros' worth. Theoretically only 7% in Petrom makes up the free float, though the actual amount is lower since stakes have already been formed. The most important minority investors are SIF Oltenia, Broadhurst investment fund, the Petrom union and various foreign investment funds. The Petrom union could buy 8% in Petrom at the same price paid by OMV, i.e. half the current price on the BSE.
Given the upward trend on the market of recent months, few investors are willing to sell.
"Foreign money keeps flowing into the stock exchange, and investors drive stock prices up to be able to buy stakes. After all, the other major companies on the market that are normally eyed by foreign investors also maintained their upward trend yesterday," says Rares Nilas, head of BT Securities, Banca Transilvania's broker.
The conclusion of Petrom's takeover by OMV provided yet another boost, since the Austrian company's contribution to the share capital increase amounted to some 830 million euros. The money, which is intended to fund Petrom's major development projects, in practice marks the conclusion of the second stage of the transaction, which sees OMV increase its interest from 33.34% to 51%.
Petrom's takeover has also driven OMV shares up, the quote for which rose from 185 euros in September 2004 to around 220 euros at the end of last year.
OMV was trading for 247.5-248.9 euros on the Vienna Bourse yesterday, making for a market capitalisation of 7.42-7.46bn euros.
The PER (price/earnings ratio) indicator "jumped" to approximately 200 in Petrom's case (considering the 2003 profit), compared with a mere 17 in OMV's case. This means that at the current price it would take a Petrom investor 200 years to get its investment back, while an OMV investor would need only 17 years. Those now buying into Petrom are relying on OMV to restructure it and make much higher profits.
adrian.mirsanu@zf.ro ; vlad.nicolaescu@zf.ro
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