Regulars
Vivid SHARE PORTFOLIO
by Adrian Stefanescu
April 2005
Having reached historical peaks by the end of February, Romanian stocks have since showed their first signs of fatigue after a long bullish period. The BET, the bourse’s main market index, reached a high of 6,521 on 23rd February, a 49 per cent increase since the beginning of the year. However, the BET-FI index which tracks the progress of the five SIFs almost doubled the general market average, reaching a peak of 33,156 on 24th February, a 92 per cent increase.
The aggressive bullish trend brought our blue chips to unexpectedly high levels, sustained by interest from local investors who have not found enough liquid stocks in the market. With such a hot market it was always a question of when, not if, a correction would take place. Negative signals from government negotiations with the IMF, the increase in capital gains tax from one to 10 per cent and the BSE’s decision to introduce a monthly fee of $50 for access to real time quotations prompted the pullback.
Since our portfolio consisted only of SIFs (SIF1, SIF2 and
SIF5) we fully benefited from their price increases over January and February.
Yet we were quick to act on the first signs of market weakness and sold our
SIFs gradually.
We have sold 50,000 SIF1 on February 18th at ROL 15,300 per share; a further
50,000 SIF1 at ROL 14,600 per share on March 10th, 140,000 SIF2 at ROL 12,800
per share on March 10th, and 146,000 SIF5 at ROL 14,500 per share on March
14th. We will remain holding cash until further opportunities present themselves.
HOW THE PORTFOLIO STANDS
| Company |
Quantity |
Price |
Average |
| - |
- |
- |
- |
Cash: ROL 6,183,551,075
Total value of protofolio** ROL 6,183,551,075*
Invested amount ROL 1 billion (approx $30,000)
Return 5th Jan 2004- 15th March 2005: 518 per cent
*trading commission of 1% included
**as at 15th March 2005
These 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 value of stocks can rise and fall and a successful track record is not a guarantee of future success. The author of the above 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.
