The stock market capitalisation of the five financial investment companies (SIFs) surged by over 86 million euros after the government ordinance to lift the holding ceiling to 1% was published in the Official Gazette. Brokers expect further significant increases.
The five SIFs currently have a market value of more than 1.15 billion euros. Since the release of the statement by the Finance Ministry two weeks ago regarding the raising of the threshold, SIF stocks have risen by 20%.
Some brokers say the SIFs will continue to see growth on the stock market, given that some shareholders will start strengthening their positions by transferring stakes. In addition, they believe that once the threshold has been lifted, foreign investment funds will also enter the SIF market, after previously shying away from buying stock in these companies because of the limit to the value of stock they were allowed to purchase. A 1% stake in a SIF is currently worth some two million euros on the stock market.
"The lifting of the holding threshold for the SIFs is a good thing, and has been long awaited by investors, not only in terms of the perspective for price increases, but also because of the free access of investors to stock. Even against current prices, a percentage of 0.1% in a SIF does not account for much, even for domestic investors. The 1% threshold allows investors to manage their portfolio better. Foreign investors are now expected to emerge, even though they have not been interested in this stock so far. In terms of trading prices, they will probably reach the peaks seen in the first months of the year, however above this level increases will very much depend on the financial evolution of the companies," says Rares Nilas, manager of BT Securities brokerage.
Some brokers believe that the five financial investment companies are likely to develop differently on the market in the future, depending on who gains control over them.
"SIFs are a good investment for any investor, and, in the long term, they will continue to rise. Raising the threshold to 1% will allow the main shareholders in the SIFs to consolidate their positions, and they will probably start transferring stakes before prices go up too much," said Valentin lonescu, operations manager for Euro Invest Vision, a brokerage company.
