Profit of the Proprietatea Fund fell 3 million lei in October

• Q3 profit up 7.3%

At the end of last month, the Proprietatea Fund had a net profit of 571.3 million lei (126 million Euros), down 3.2 million compared to the Q3 net profit, according to a press release sent to the Bucharest Stock Exchange (BSE).

In October, the net asset grew 1.32%, to 12.877 billion lei (2.839 billion Euros), from 12.71 billion lei at the end of September. The NAV also climbed to 0.9601 lei/share, from 0.9476 lei/share in September.

The receivables of the Proprietatea Fund at the end of last month fell 2.7 million lei compared to the previous month, down to 13.3 million lei.

The total value of the dividends earned this year is 623.6 million lei, of which 353.1 million lei (56.6%) will come from "OMV Petrom", and 140.63 million lei (22.5%), from "Romgaz".

At the end of October, investments in government bonds amounted to 312.2 million lei, up 18.75% over the amount at the end of September, of 262.9 million lei. Bank deposits fell 11.7%, from 509.1 million lei, in September, to 449.5 million lei, in October.

• The energy sector, 85% of the total assets

At the end of October, the holdings in companies in the energy sector amounted to almost 85% of the total assets of the Proprietatea Fund. The oil and natural gas sectors represented 47.03% of assets, compared to 46.21%, that of transport, distribution and supplying of electricity and natural gas, 24.91% (25.3% in September), and the production of electricity reached 12.21% (12.37% in September). Stakes in companies in the infrastructure sector represented 3.38% of the total value of assets, and those in banks amounted to 3.26% (3.04%).

Shares of "OMV Petrom" have remained its top largest holding, and their weight climbed from 35.23% to 36.21% of the assets, followed by the stake in "Romgaz", which represents 10.07% of the total (10.2% in September). The third largest holding is "Complexul Energetic Oltenia" (Oltenia Energy Complex), which accounts for 8.35% of the total assets (8.5% in September).

• Profit after the first nine months, up 7%

Profit of the Proprietatea Fund at the end of September rose 7.3%, to 574.5 million lei. Total revenues rose 44.5% in the first nine months of the year, compared to the similar period of last year, to 861.2 million lei (194.2 million Euros), and expenses increased 4.8 times, to 286.3 million lei (64.5 million Euros), according to the quarterly financial statement. In the first three quarters of 2011, the Proprietatea Funds had 595.8 million lei in revenues and expenses of 59.3 million lei.

Almost one quarter of the revenues come from the sale of stakes in various companies (208.1 million lei). At the same time, 195 million lei of the expenses were incurred through the sale of financial investments and represent the cost or the book value of those investments before the sale.

In the first nine months, the Proprietatea Fund sold its entire stake in Azomureş (for almost 130 million lei) and part of its holdings in Erste Group Bank AG and Raiffeisen Bank International AG (57.8 million lei). "The gross book value of these stakes was 194.8 million lei (reflected in the profit and loss account under expenses with sold financial investments) whereas revenues from their sale amounted to 207.7 million lei (reflected in the profit and loss account under Revenues from sold financial investments)", according to the report pertaining to the first quarter of the year. At the end of September, the Proprietatea Fund still had 0.1% of Erste and 0.43% of Raiffeisen. The stakes in the two banks are the main investments made by the Fund in Austria, investments which amounted to 1.2% of the total assets, at the end of October.

Franklin Templeton earned a commission of 25.5 million lei in the first nine months for the management of the Proprietatea Fund, slightly over what it earned in the similar period of last year (25 million lei). Salaries of the members of the Board of Representatives fell 3% in the first nine months, to 388,000 lei, compared to 400,000 in the similar period of 2011.

This year, the Proprietatea Fund participated with 2.5 million lei in a share capital increase of 21.1 million lei at GDF Suez Energy România.

At the end of October, foreign investors held 51.49% of the shares of the Proprietatea Fund. FP holds stakes in 69 companies, of which 25 are listed (44.4% of the total value of the assets) and 44 unlisted (49.7%).

American hedge fund Elliott Associates, the biggest shareholder of the Proprietatea Fund, holds 15.33% of the shares, a stake which represents almost 16% of the voting rights in the General Shareholder Meeting.

The second largest institutional shareholder of the Proprietatea Fund is City of London, which holds 9.43% of the shares, of which 4.18% in the form of stock, and the rest in the form of warrants issued by RBS for the shares in question.