Wednesday, September 23, 2009

Romania's SIF shares up on higher stake cap hopes

BUCHAREST, Sept 22 (Reuters) - Shares in Romania's five geographically-defined investment funds traded near 11-month highs on Tuesday, after a senate committee voted to raise the cap on maximum stakes to 5 percent from 1 percent.

Observers say the bigger cap, which the funds opposed, is seen as a way to boost liquidity on Bucharest's bourse, which has a meagre market capitalisation of around 18 billion euros."There is still a very long process to go through," said Senator Viorel Arcas, a member of the budget-finance committee.

The high-yielding funds, or SIFs, are closed-end entities set up by the government in the 1990s as part of a mass privatisation programme and listed on the Bucharest Stock Exchange in 1999.SIF shares, which have a market capitalisation of 3.3 billion lei ($1.14 billion), are among the most liquid on the Bucharest bourse.

The BETFI .BETFI index, which tracks the five funds, was up 4.1 percent by 1235 GMT, near 11-month highs and outperforming the bourse's main index .BETI, which was up 1.9 percent, in line with regional peers."The SIFs are rising because the Senate commission approved an increase in the shareholding cap to 5 percent," said one trader with a foreign brokerage house in Bucharest.Since parliament resumed its session on Sept. 1 the BETFI index has risen roughly 18 percent amidst speculation that the years-long debate on raising the ownership cap was nearing its end.The increase still needs the senate's approval before it is sent for debate in parliament's lower house, which has the final say. (Reporting by Luiza Ilie and Marius Zaharia; Editing by Greg Mahlich)

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