SIF Market Value, Barely Half Of Their Asset Value

The financial investment firms (SIFs) continue to have a market value equal to less than half of their net asset value, although the price of their shares on the Bucharest Stock Exchange (BSE) has increased significantly since the beginning of the year.

The market value of the financial investment firms listed on the BSE is currently smaller than the value of their assets as of 31 August by an average of 53 per cent. The situation is radically different than it was in July 2007, when the market value of the SIFs peaked at 25 per cent above the net asset value.

The market value of the SIFs plunged to the lowest levels in several years in March-April 2009, when the price of their shares equalled roughly one third of the value of the assets in their portfolio.

The market capitalization of the five financial investment firms listed on the Bucharest Stock Exchange is currently 3.12 billion RON, down from the all-time peak of 11.5 billion RON recorded in June 2007.

The combined net asset value of the five financial investment firms reached 6.7 billion RON at the end of August 2009, up by 9 per cent from the previous month. However, the value of their shares on the BSE had a faster growth rate, as the BET-FI Index reflecting their performance gained over 15 per cent in the same interval.

SIF4 Muntenia offers the lowest ratio between asset value and market value, as the firm is currently worth 42 per cent of the net asset value reported at the end of August. SIF2 Moldova is at the opposite end of the ranking, with a market value equal to 52 per cent of the asset value.

Eight months through the year, SIF Oltenia was the most profitable of the five firms with net earnings of 197.6 million RON, whereas SIF Muntenia had the worst performance in the group with net earnings of 77.6 million RON.

Generally, the SIFs continued to deliver substantial profit growth, even after having collected dividends from the companies in their portfolio. SIF Transilvania and SIF Oltenia currently have the largest asset values in the group, with 1.49 billion RON and, respectively, 1.43 billion RON.