Rompetrol Rafinare (Petromidia) shares saw their lowest closing price of the last six months yesterday, during the first trading session, after the seizing of part of the shares held by the Rompetrol Group in Petromidia. Which only served to worsen the uncertainty surrounding the company.
The appeal prosecutors filed to challenge the decision of the judges on March 3 to deny the request to arrest businessman Dinu Patriciu, Rompetrol group chairman, is being tried today. As with previous proposed arrests, this led to an increase in sell orders on the market.
Petromidia shares fell to a minimum of 0.0910 RON/share and ended the day at 0.0935 RON/share, down more than 7% from the previous day. Rompetrol Rafinare lost 20 million euros of its market value yesterday alone, with the decline since the beginning of February, when the investigation in the Rompetrol case picked up speed again, amounting to 175 million euros.
The scandal in which the company and its management are involved is making more and more foreign investors stay away from Petromidia shares. Foreign investors are calling the shots on the Bucharest Stock Exchange, but the market is now mostly dominated by speculators who are trying to profit from the heavy fluctuations.
Furthermore, brokers say that the trend of the Petromidia shares has nothing to do with the company''s business, and is really unpredictable. This is why few brokers are venturing to make forecasts, especially since the trend of the shares is influenced by the ongoing investigations.
"It is very hard to say where Petromidia shares will go from here, particularly because I did not understand much of why the prosecutors demand shares to be seized. I think they should fluctuate around the current price. I think investors have already grown accustomed to hearing nothing good about Petromidia," the trading manager of one of the leading brokerage firms on the market commented yesterday. Brokers are also complaining about the procrastination of the probe, which makes the market nervous. Dinu Patriciu was officially charged a year ago, and has been called to the Prosecutor''s Office 20 times since then, while prosecutors issued two requests for arrest.
"There''s no analysis or forecast you can make for Petromidia any longer. All you can do is anticipate what the next step of the investigation will be," an analyst on the Bucharest Stock Exchange commented yesterday.
The seizing by the prosecutors of a 25.8% stake in Petromidia held by the Rompetrol Group could prevent Rompetrol expansion plans, given that Patriciu has been selling several smaller stakes in Petromidia on the Bucharest Stock Exchange over the last few years to finance other investments of the group.
It is not yet clear why the prosecutors did not decide to seize Patriciu''s fortune instead of assets in one of the companies he is a shareholder of.
The rest of the stake Rompetrol Group NV owns in Petromidia that has not been seized has been pledged as collateral to banks for funding attracted by the company and it too may not be sold.
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