Wood&Company, one of the leading brokerage firms in Czech Republic has listed a warrant-type derivative product on the Vienna Stock Exchange with the shares of the Property Fund (Fondul Proprietatea) as underlying asset. This provides the first official quotes for the fund's shares, while the Romanian authorities have been procrastinating floatation of the fund on the Bucharest Stock Exchange (BSE) for three years now.
A warrant has 500,000 Property Fund shares as underlying asset and was trading for 36,300 euros on Tuesday, therefore the price per share stands at 0.3 RON (1 RON is the par value), 15-20% higher than the prices at which they were sold and bought at the end of last year, 0.25-0.26 RON/share. At this price, the fund, which has 3,200 shareholders, is valued at more than one billion euros, given that it holds assets worth about 2.8 billion euros.
The buyer of the derivatives does not actually own the shares, which are still held by the issuer (Wood&Company in this case), but the price of the certificates reflects the price of the Property Fund shares, the same as CFDs do.
The structured product issued by Wood&Co is the first to provide a public, official and transparent price of a Property Fund share, considering the fund's shares have selling via classified ads or through brokers in Romania for almost two years. These transactions are hardly transparent, are unregulated and unsupervised by any authority and are registered with the Central Depository together with the property transfer later.
"This product gives access to Romania to those investors that normally do not have access to the Romanian market or the Property Fund," Bernhard Eiwan, managing director of Wood&Company told Ziarul Financiar.
On the other hand, those who own shares in the Property Fund will have to wait for the floatation of the fund if they want to sell
