The shares of Petrom, the largest company listed on the Bucharest Stock Exchange, fell by nearly 7% during the trading session yesterday and ended the day 5.2% lower than in the previous session. This was caused by escalating fears that 8% of the company, worth some 750 million euros, were to become available for sale on the market.
It is about the stake that the state is supposed to sell to the Petrom employees, with the method of sale probably decided in the next few days.
Petrom''s market value shed 480 million euros yesterday, to a total of 8.6 billion, which is why the total capitalisation of the Bucharest Stock Exchange fell to less than 18 billion euros, after having overshot 20 billion euros last month.
Petrom reached 0.535 RON/share yesterday and ended at 0.545 RON/share, being the most traded company on the market, with 1.5 million euros in transactions. Brokers and investors are afraid that the Government will approve the sale of the Petrom stake directly to the employees, and they could sell these shares on market immediately afterwards, given that they will be buying at a price nearly three times lower.
"The issue of the sale of the shares to employees is what is pulling the quote down.
"They will stand to gain even if selling at 0.45 or 0.4 RON/share, unless they are prohibited to sell for a while, considering that they are buying at 0.2 RON/share," says Rares Nilas, BT Securities manager.
Under the privatisation contract of Petrom, the employees may buy shares at 5.25 eurocents a piece, which translates into 0.18 RON/share at the current RON/EUR exchange rate. Petrom''s shares were quoted at 0.54 RON on the market.
Codrut Seres, the Minister of Economy and Trade, had said on Monday that he hoped to see the memorandum on the sale of the Petrom shares to employees discussed during this week''s government session, set to take place today.
He added the Ministry he runs had proposed two options to the government: that is to sell the stake directly to the employees and to sell it indirectly through the Employee Association of Petrom, headed by Liviu Luca.
President Traian Basescu and Premier Calin Popescu-Tariceanu had previously stated they were for a direct sale of the shares to the employees.
"The information about the Government discussing the sale of 8% in Petrom to employees was what generated the slump. On top of this came a larger sell order, probably placed by a foreign investor," says Valerian Ionescu, head of operations with CA IB Securities.
Sales by foreign investors of Petrom and BRD stocks have been noticed on the market for a while. BRD in turn dropped 1.75% yesterday, ending the day at 16.8 RON/share, the lowest price since the end of January.
"The price at which the employees will buy may seem low today, but it was higher than the market price when it was decided that the employees should be allowed to buy.
"This is why I see no reason why restrictions should be set on the sale," Ionescu added. vlad.nicolaescu@zf.ro
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