Jan. 17 (Bloomberg) -- Mark Mobius, who oversees $34 billion for Templeton Asset Management, plans to diversify Romanian Property Fund’s portfolio with central and east European companies after the fund’s Jan. 25 share sale.
Franklin Templeton Investment Management Ltd., which manages the 3.6 billion-euro ($4.8 billion) Romanian fund known as Fondul Proprietatea SA, wants to “get rid of” unprofitable businesses and buy stakes in regional companies, such as Austrian banks and refineries, that have exposure to Romania, Mobius said in an interview in Bucharest today. The restitution fund will be sold directly to investors on the Bucharest Stock Exchange.
Fondul Proprietatea owns stakes in 83 companies, including Romania’s largest oil company OMV Petrom SA, Transelectrica SA and Transgaz SA, the state’s power and natural gas transportation grids, natural gas producer Romgaz SA and atomic power company Nuclearelectrica SA. The fund was set up to compensate Romanians for property confiscated under communism.
“The first objective for Fondul Proprietatea is to invest in Romania and to encourage companies in Romania but if there are foreign companies that have exposure to Romania then we would be interested,” Mobius said. “It could be any sector, and there are not that many at this stage, but we would be interested in any company, let’s say companies in Austria, banks, oil companies.”
Fondul Proprietatea may sell shares on international markets, such as London, Vienna or Warsaw by the end of this year and may attract strong interest from international investors, he said.
“Right now the emerging markets are generally popular because of the high growth and tremendous performance so we get a lot of money coming into these emerging-market funds and more importantly the frontier-market funds, and Romania is a frontier market,” Mobius said.
Fondul Proprietatea forecast net income to increase this year to 207 million lei ($64.72 million) from an estimated 195 million lei last year. The future profitability depends on the government’s decision to sell stakes in energy companies and the “attitude towards foreign investors,” according to Mobius.
Romania is preparing to offer minority holdings of its utilities to meet international bailout conditions and cover infrastructure investments. It also plans to sell a 9.84 percent stake in Petrom on the stock exchange this year and a minority stake in Romgaz as well as plans to finish selling shares in Transgaz and Transelectrica, Economy Minister Ion Ariton said on Nov. 18.
Fondul Proprietatea’s portfolio manager, Greg Konieczny, also said today in an interview that Romania should consider selling shares in state-owned companies Nuclearelectrica and hydro-power producer Hidroelectrica, by next year.
--Editors: James M. Gomez, Hellmuth Tromm
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