Saturday, March 7, 2009

Romanian Stocks Rally Most in World on Draft Takeover Rule

By Irina Savu

March 6 (Bloomberg) -- Romania’s benchmark stock index climbed to a two-week high after the market regulator said it drafted rules that require investors controlling more than a third of a company to make an offer for the remaining shares.

Rompetrol Rafinare Constanta SA, the country’s second- biggest oil refiner, surged 15 percent. The BET Index climbed 4 percent to 2,017.39, posting the biggest gain among 91 equity benchmarks tracked by Bloomberg worldwide.

The Romanian Securities Commission said today it drafted rules requiring investors who control more than 33 percent in a company either alone or with someone else through another unit to make an offer for the shares they don’t own. Today’s advance trimmed the BET’s retreat this year to 33 percent.

“It’s a rally because of the draft rule, prices are really low now, and everybody wants to take advantage of a higher price when an offer is made,” Mario Chirila, a broker at Intercapital Invest SA in Bucharest, said in a telephone interview today. “It’s an emotional reaction to positive news.”

The BET slid to the lowest since 2003 on Feb. 25 as economic growth slowed and the deepening global financial crisis prompted investors to flee riskier emerging-market assets. A report today showed Romania’s unemployment rate rose to a two-year high in February as managers cut staff amid declining international demand for industrial products and services.

The International Monetary Fund predicts Romania will enter a recession in 2009. Economic growth slowed to 2.9 percent in the fourth quarter of last year from 9.2 percent in the third quarter.

Welcome Offer

“At a time when the Romanian stock market is facing serious problems because of the global financial crisis, we welcome these mandatory offers, which will bring back significant sums to stimulate the Bucharest Stock Exchange,” the stock market investors’ association said in an e-mailed statement today.

Rompetrol Rafinare, the second-biggest stock in the BET index with an 18.5 percent weighting, jumped the maximum allowed in a day, to close at 0.0299 lei after the announcement. At that price, the company is valued at 631 million lei ($187 million). Rompetrol Rafinare is controlled by KazMunaiGaz National Co. of Kazakhstan through its holding in its unit Rompetrol Group NV,

Rompetrol Well Services SA, another unit of Rompetrol Group, also soared 15 percent to 0.362 lei, a seven-week high. The company has a market value of 101 million lei.

To contact the reporter on this story: Irina Savu in Bucharest

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