Romanian entrepreneurs: Our business is more solid than the Bourse indicate

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Entrepreneurs and managers of companies running on Romanian capital and traded on the Bucharest Stock Exchange (BVB) are arguing that the declines on the Bourse do not significantly influence the business of their companies, and the only negative effects would be in terms of image and the investors’ perception of them.
 
“I am not personally affected by the falls in the Bourse, because I do not intend to sell. Yet, in moral terms the situation in which other investors there are does affect me. This is a momentarily situation, which can indeed be prolonged, but I cannot see how it could affect us, since our companies are able to secure capital on their own, without the need to raise it on the stock exchange,” says majority shareholder in Prospectiuni Bucharest land surveying firm Ovidiu Tender, which company has witnessed a slash by 217 million euros in its market value since early 2008.
 
Tender also says that the exchange decline, particularly the absence from the market of foreign investors, generate a fall in the competitiveness of local companies.
Principal shareholder in Banca Carpatica and the Atlassib transport company Ilie Carabulea says the downfall in the share prices do not affect his business in the least.
 
“I do not have any problem. I am faring better than ever. We have a solid capital base; we have performed a capital increase to support the bank and we are competing with the world’s largest financiers. Five years ago, very few people knew me, but now everybody knows me, even abroad,” Carabulea tells daily Ziarul financiar.
 
Among the most important local investors owning companies floated on the BVB are the SIF financial investment companies, which market value has so far this year gone down more than the value of the companies in their portfolio have. For instance, SIF Transilvania has seen its capitalisation dwindle by 450 million euros, which means some 65% of the initial value, more than the decline of any company in its portfolio.
 
 “I am worried about what is happening on the world markets and the stock exchange, because all the downfalls there affect us directly. I have never imagined that a SIF3 share would be worth less than RON 1, and yet that is what has happened,” says SIF 3 Chairman Mihai Fercala.
Fercala also says the decline on the Romanian stock exchange is rather the result of emotional causes than or facts.
 
There are some voices in the local business community arguing that what is happening now on the Bourse is normal, given the current state of affairs in world markets, and has nothing to do with capital provenance.
Chairman of the Association of Romanian Business People (AOAR) Florin Pogonaru argues that the downfalls on the BVB are justified, because Romanian companies are generally small sized and the decline is connected to business positions.
 
Pogonaru says that, for instance, real estate developer Impact had its market value dwindle because of the worries over the real estate and the construction sectors. “I do not believe the decline has anything to do with the fact that the companies are Romanian,” says Pogonaru.
 
A breakdown by business fields of the falling Romanian companies read nine of them  are operating in the construction, construction materials and property industries; five in the machinery and equipment sectors; four in the energy sector; three in the financial and banking system, and two in the food industry.
 
Retail trade, pharmaceuticals and tourism are there with only one company each running on Romanian capital.
According to Ziarul financiar, the largest decline rate were reported by Imotrust Arad (ARCV), 83%; Broker Cluj (BRK), 83%; Impact Developer (IMP), 80%; Constructii Transilvania (COTR), 78%; Turbomecanica of Bucharest (TBM), 76%, and Prospectiuni of Bucharest (PRSN), 70%.
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