Fondul boosted by narrowing discount – Fondul Proprietatea has announced results for the year ended 31 December 2020. The NAV total return (in Romanian leu – RON) was 2.21% and the share price return was 26.44%, boosted by a substantial narrowing of the discount which finished the period at 9.7%. The Romanian market did well relative to other eastern European stock markets, with a return for the year of -4.7% in local currency and -6.3% in euros.
The fund continues to return cash to investors with the completion of its eleventh buy-back programme for 797.96m shares (valued at RON 1.07bn or £193m), a dividend of RON 418m in July (RON 0.0642 per share) and the completion of 3 tender offers for 585m shares at RON 1.39 per share.
Within the portfolio, OMV Petrom SA, the largest listed holding in the portfolio recorded a share price decrease of 18.7% with a total NAV impact of RON 529.9m. Additionally, the value of unlisted holdings decreased by RON 787.9 million following the valuation update at the end of December 2020.
The largest unlisted investment by far, accounting for 67.7% of that part of the portfolio at the end of December, is Hidroelectrica. [You may have seen in our note on AVI Global, which holds Fondul, that some commentators expect that this company will IPO fairly soon. There was no mention of this in the report that we could see, but that does not mean that it will not happen. Fondul’s reports always look as though they were written by a government department and then signed off by three different sets of lawyers (masses of detail and caveats obscuring the story). We very much doubt that speculation about a potential IPO would ever make it into the report.]
FP : Fondul boosted by narrowing discount