Regulars
Vivid SHARE PORTFOLIO
by Adrian Stefanescu
February 2005
Since our last check of Vivid’s portfolio Romania’s
stock market has continued its rally, taking the indexes to unprecedented
levels. The main BSE Index, the BET-C gained 104 per cent during 2004. This
year has begun even more spectacularly, with the BET-C gaining a further 17.5
per cent in the first two weeks of 2005. Yet the performance of the Vivid
portfolio of stocks has easily outstripped that of the market: from our start
date of 5th January 2004 to 15th January 2005, the portfolio has gained almost
300 per cent in value.
The portfolio has a completely new look about it, compared with two months
back. At the end of November, Broker Cluj, one of Romania’s leading
Romanian brokerage houses, launched an IPO to become the first BSE-listed
broker. Broker Cluj has an aggressive portfolio strategy which yields large
capital gains from its own portfolio management, in addition to the incomes
from brokerage commission. We decided to participate in the IPO, and sold
our BRD shares at ROL 33,000 in order to free up enough cash. However, the
IPO was three times oversubscribed, and as we only managed to acquire a third
of the number of shares we had hoped for (namely 18,500 shares at ROL 15,500
each) we used the remaining cash to buy 76,000 shares in SIF5 at ROL 7,500
each.
During January, Argus reached ROL 48,000 per share as compared with our purchase
price of ROL 26,400 per share. We took profits at that level and with the
money bought 140,000 SIF2 at ROL 8,250 per share and 100,000 SIF1 at ROL 9,850
per share.
While some sceptics might consider that some of our stocks have reached unrealistic
levels, we have resisted the temptation to switch into cash for the time being,
and instead have moved into stocks that appear to have been overlooked in
terms of their financial figures. At these market levels, we consider the
SIFs to be the most undervalued among our bluechips. Our decision to stay
in the market is backed by the unprecedented inflows of capital from domestic
investors, who have continued to move their cash out of bank deposits as interest
rates progressively move lower.
The above comments shouldn’t be construed as advice
or recommendation to invest in any kind of security or to buy and/or sell
the above discussed stocks. The author of the article is an active investor
on the Romanian capital market, who is currently trading the stocks discussed
above, thus his comments should be considered accordingly.
HOW THE PORTFOLIO STANDS
| Company |
Quantity |
Price |
Average |
| SIF Banat Crisana |
100,000 |
9,850 |
9,850 |
| SIF Moldova |
140,000 |
8,250 |
8,250 |
| SIF Oltenia | 146,000 | 10,600 | 7,450 |
| Broker Cluj | 18,500 | 15,500 | 15,500 |
