After a three-month 'vacation', TLV loses 58% on trading day one

After a three months absence from Bucharest Stock Exchange, Banca Transilvania shares came back on trading yesterday and closed down on a -58% variation band, although the market was displaying a 320% growth. The sharp decline of shares led to collapse of BET index by -12.2%, on 5.4 million euros liquidity, TLV contributing with more than a half.

300% variation displayed by the system is nominal

Banca Transilvania shares were suspended from trading on September 15, for capital raise and nominal-value consolidation, dodging from aggressive fall registered in October by BSE.

The nominal value of a TLV share was modified from 0.10 lei to 1 leu/share, while common capital was raised to nearly 1.06 billion lei.

Experts polled by Wall-Street explained why the variation was negative while the system was displaying a roughly 300% growth.

“When we are dealing with operations over common capital or over the nominal value, the nominal variation has no value. This is because the stockholder is not affected by the variation, but by the real variation”, said Paul Brendea, analyst at Prime Transaction.

“The closing price of TLV was 0.2620 after reverse split operations, but a correction in this range, is probably linked to the prior closing quotation, of three months ago. Therefore, if the last quotation was 0,262 and now is 1,14, then the system displays a 320% growth, but actually, there was a 58% decline at 1.14”, said Rares Sofariu, research and development manager at KD Capital Management.

The real depreciation of Banca Transilvania shares, namely 58 percent is much steeper than the decline of BET index in September 12, 2008 – Jnauary 6, 2009 (-38%), sharper than BRD shares fall, of 45 percent and near to BET-FI index meltdown in this interval (-56%).


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