Erste Bets on A&D Pharma, Banca Transilvania

Negative news from the US found their way into European markets and ignoring the still sound growth outlook for these markets, according to an Erste report on CEE markets. Erste analysts expect the markets to remain nervous for a while without a clear direction. However, based on still good fundamentals the current correction should finally deliver some interesting levels again.

The ZEW indicator for July 2007 provides again a rather comfortable view, even though survey participants become more cautious regarding the economic outlook. Erste specialists see this also as a function of the fact that they have been operating on high levels of expectations for already quite some time and the outlook start to move more in a sideways trend. Interestingly, while the current view on the Eurozone has improved slightly (+3.7), the economic expectations worsened again by -21.6 points, pushing the indicator in the red (-14.3).

For CEE, however, the outlook still remained positive at 8.8, decreasing by only 1.8 points. Analysts see this again as a confirmation of their view that the Eurozone moves along a \"normal\" economic cycle, while CEE enjoys the much longer push of convergence, providing a longer lasting growth outlook.

As far as Romania is concerned, Erste analysts remain positive on A&D Pharma, even though limited liquidity keeps the situationdifficult.

The report also mentions the fact that Banca Transilvania announced that 98.52% of the new shares issued at a price of RON 0.35 per share were subscribed by shareholders recorded on May 11, which was the registration date of a share capital increase approved on April 25. Banca Transilvania\"s shares were traded at a price of at least RON 0.7350 per share in the last month. In these circumstances, the price of the new shares was very attractive. The bank raised EUR 43mn from 20,995 shareholders. Banca Transilvania has continued the policy of bonus issues and new issues at below-market prices. Every shareholder was able to buy 100

shares for each 1,000 shares held. The shares that were not subscribed will be offered to employees at a price of RON 0.36 per share.