Which BSE titles did Pilon II funds trade in the third quarter?

The Pilon II private pension funds, to which employees in our country contribute 4.75% of their gross monthly income, bought shares in OMV Petrom, Hidroelectrica, Romgaz and BRD-Groupe Societe Generale, in the third quarter of the year, but they sold Banca Transilvania securities and especially Fondul Proprietatea, according to our calculations based on the reports of the managers of the seven funds and the Bucharest Stock Exchange (BVB).

In some cases, the sales can be explained by the legislative limitation according to which the funds can invest only 5% of assets in the shares of a company where the state has a participation of less than 50% of the capital, while in the case of FP the pension funds continue the disinvestment process started after the sale of the holding in Hidroelectrica. On the other hand, the purchases of Romgaz bonds, issued by the natural gas producer at the end of September, stand out, an offer in which most Pillar II funds participated.

• No fund bought Banca Transilvania shares

The investment value of the seven mandatory private pension funds in Banca Transilvania shares was 6.64 billion lei, at the end of September, slightly below the one in the middle of the year, of 6.72 billion lei, given that the share price (adjusted according to capital increase with allocation of free securities) had a slight depreciation, to which is added net sales of the funds.

In the third quarter of the year, the Metropolitan Life and Aripi funds slightly decreased their holdings in the credit institution (taking into account the freebies received in July), most likely due to the fact that, in the middle of the year, their holdings of Banca Transilvania shares were equivalent to 4.95%, respectively 4.92% of assets, within the limit of the 5% threshold. The rest of the mandatory private pension funds kept their stakes in the credit institution, so Pilon II's holding in Banca Transilvania decreased slightly to 26.2% in the third quarter, compared to mid-year when it was 26.3%. The biggest package, of almost 8.9%, belonged to the fund managed by NN Pensii, which manages the largest sums of money.

• Pilon II funds owned 11.1% of Hidroelectrica at the end of September

The value of the Pilon II pension funds' investments in Hidroelectrica shares increased in the June-September period to 6.25 billion lei, compared to 6.1 billion lei in the middle of the year, due to acquisitions and the slight appreciation of the share price. The Aripi funds and those managed by NN Pensii and BCR Pensii bought shares of the electricity producer and supplier, while the other Pilon II funds kept their Hidro shares in their portfolios. The company is 80% owned by the Ministry of Energy, so the limit up to which the funds can buy Hidroelectrica shares is 10% of the asset, according to the legal provisions.

At the end of September, the seven funds had 11.1% of the company, the largest package, of almost 3.4% of the company, belonged to the fund managed by NN Pensii, worth 1.9 billion lei at the then price of the action.

• AZT Viitorul Tău, Metropolitan Life and the fund managed by BCR Pensii bought OMV Petrom shares

Three Pilon II funds, namely AZT Viitorul Tău, Metropolitan Life and the one managed by BCR Pensii bought OMV Petrom shares in the third quarter of the year, while Aripi and the fund managed by NN Pensii, whose holdings in the producer of oil and gas equaled 4.8% and 4.9% of capital at mid-year, sold the company's securities.

Overall, Pilon II funds had net purchases of OMV Petrom shares in the third quarter, but the share price fell, so the total value of holdings decreased to 6.1 billion lei, compared to 6.3 billion lei, in the middle of the year. At the end of September, the funds had 13.4% of the company, of which almost 4.7% represented the Metropolitan Life package.

• None of the mandatory private pension funds sold Romgaz and BRD shares

Aripi, Vital, the fund managed by BCR Pensii and the one managed by BRD Pensii bought shares of Romgaz, in the third quarter of the year, without sales from other funds, so that Pilon II's holding in the natural gas producer rose to 17,4%, slightly above that of the middle of the year. On the other hand, the share price decreased, so that the total value of the portfolios decreased from 3.9 billion lei to 3.7 billion.

BRD-Groupe Societe Generale was another major BSE company where no Pillar II fund sold shares in the third quarter of the year, while Aripi and Metropolitan Life bought shares in the bank. At the end of September, the Pilon II pension funds had 18.4% of the bank, the largest package, 2.8%, belonging to Metropolitan.

• Six of the seven Pillar II funds sold FP shares

The pension funds continued their sales of Fondul Proprietatea shares in the third quarter, ending up with around 7.6% of FP, compared to 14.1% in the middle of the year, percentages that take into account the reduction of the capital made by the issuer in September. Also benefiting from the offer made by the fund, six of the seven Pillar II funds sold FP shares, between June and September. Aripi, Metropolitan Life and the fund managed by BCR Pensii completely exited the ownership of Fondul Proprietatea, while Vital was the only one that kept its position.

FP has lost its importance after the sale of the holding in Hidroelectrica, the state is putting pressure on the fund to no longer be able to make buybacks and to stop selling stakes, requests that have so far been rejected by shareholders, but any listing from the portfolio is up to dependent on the goodwill of the state.

• Purcari Wineries - the only issuer in BET that is not found in the funds' portfolios

Arobs Transilvania Software appears for the first time in the portfolios of mandatory private pension funds, with a cumulative holding of 13.69% of the IT company, of which the AZT Viitorul Tău fund had 9.77% and Metropolitan Life 3.92%. Arobs moved from the AeRO Market to the BVB Regulated Market in September last year, and in June this year it carried out a capital increase in which the funds participated.

The IT&C sector is the engine of the main world stock exchanges, but at BVB it is very poorly represented, a reflection of the low degree of development of our capital market.

Purcari Wineries is the only issuer in BET that is not found in the Pillar II portfolios, probably because of the risks perceived by the administrators due to the location of the company in the Republic of Moldova, a country that is not part of NATO and is on the brink of war in Ukraine. The former SIFs, once the stars of the Bucharest Stock Exchange, are completely off the radar of pension funds, a fact that illustrates the administrators' lack of trust in the management and transparency of some of these companies.

• Pilon II funds subscribed 17% of the bonds issued by Romgaz, worth 500 million euros

Six of the seven private mandatory pension funds invested almost 413 million lei in the bonds issued by Romgaz, the euro equivalent of about 17% of the entire issue worth 500 million euros. The largest investment, of 102 million lei, was of the AZT Viitorul Tău fund, while the Vital fund subscribed bonds of 89.5 million lei, and Aripi of 76.5 million lei. The investment of the fund managed by NN Pensii in the bonds of the natural gas producer amounted to 60.8 million lei, the fund managed by BCR Pensii placed 45.7 million lei, and Metropolitan Life invested 38.3 million lei. The fund managed by BRD Pensii, which will be taken over by Banca Transilvania, is the only one that did not buy Romgaz bonds.

The bonds issued by Romgaz have a maturity of five years, the interest rate is 4.77%, the money will be used by the gas producer to finance the Neptun Deep project.

At the end of September, mandatory private pension funds had assets worth 149.95 billion lei, about 65% of the money being placed in Romanian government securities, 5% in bonds and 25% in shares. The number of participants was 8.24 million, according to the Financial Supervisory Authority.