Regulars
Vivid SHARE PORTFOLIO
by Adrian Stefanescu
May 2005
Our decision to turn to cash last month proved inspired since the market continued to fall after our selling. Reportedly, some foreign capital had migrated from CEE markets to US fixed income instruments as a result of increased interest rate pressureon the American dollar. As a matter of fact, all the CEE markets were bearish in this period. Rather than significant outflows from our market, we felt a reluctance on the part of foreign investors to buy for the time being.
However, we couldn’t stay in cash for too long, so we have taken positions in SIF2 and SIF5 as their prices fell enough to become attractive again. Positive news such as the postponement of the implementation of the increase in capital gains tax from one per cent to 10 per cent as well as the positive vote in the European Parliament for Romania’s accession in 2007, have encouraged us to go back to stocks. Still, we’ve been cautious enough to spend just half our cash reserves and keep the other half for further opportunities.
We saw that a new IPO was launched – that of the pulp and paper producer Vrancart. However we have decided not to participate, considering the price of the IPO appears to be rather expensive in the current market.
During the last month, we bought 100,000 SIF2 at ROL 10,900 per share on 12th April and 100,000 SIF5 at ROL 12,900 per share on 15th April.
HOW THE PORTFOLIO STANDS
| Company |
Quantity |
Price |
Average |
| SIF Moldova |
100,000 |
10,900 |
10,900 |
| SIF Oltenia | 100,000 | 12,900 | 12,900 |
Cash: ROL 3,803,551,075
Total value of protofolio** ROL 6,183,551,075*
Invested amount ROL 1 billion (approx $30,000)
Return 5th Jan 2004- 15th April 2005: 518 per cent
*trading commission of 1% included
**as at 15th April 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.
