Fondul Proprietatea (FP) had a net profit of RON 1.28 billion in 2017, a 188.5 percent increase from 2016, when the net profit was RON 447 million, a report by the company states.
According to the report, the proposal by the administrator of the Fund regarding the distribution of the net profit from 2017 is as follows: RON 64.4 million to the legal reserve; RON 591 million to dividends; and RON 634.3 million to remain at the disposal of shareholders. This proposal will be submitted for the approval of the Administrative Board.
The report states: “Romania was in 2017 the country with the best performing economy in the EU. At the moment, economic growth is at 6.5 percent, higher than what was initially predicted, which is mostly due to domestic consumption. For 2018, it is expected that the GDP will maintain a solid growth rate estimated at 4.8 percent, closer to the economy’s real potential. Private consumption should remain the main driver of GDP growth, stimulated by the increase in the minimum wage, and of salaries and pensions in the public and private sectors.”
“The macroeconomic framework continues to be positive – in 2017 the public debt was below 40 percent of GDP, and the budgetary deficit was kept under control, under the 3 percent threshold. Unemployment continued to decrease below 5 percent. However, the high growth rate of the GDP, the strong foundations and the positive regional and global perspectives should all be supported by a more stable political environment”, FP concludes.
The Fund’s representatives note that the sectors with good potential for growth are energy, transports, IT, banking, construction, agriculture and health.
The listing of companies on the stock exchange is the key factor in the development of the local capital market. New listed companies wouldn’t just stimulate liquidity and attract new investors, but they can also ensure a better exposure of pension funds to the local capital market, as well as the continued growth of the mutual funds sector. New IPOs would significantly contribute to the promotion of the local capital market from its current status of frontier market to the status of emerging market, according to Fondul Proprietatea.
The two largest companies in FP’s portfolio are ready for IPOs – Hidroelectrica SA and Aeroporturi Bucuresti SA, and the Fund aims to collaborate with the government in order to launch the IPOs.