To take about RSD 2,500 or to wait - Trading in shares of Petroleum Industry of Serbia started on Belgrade Stock Exchange

Long-announced trading in the shares of the Petroleum Industry of Serbia started today (August 30, 2010) on the Belgrade Stock Exchange at the starting price of RSD 505.

Until 1 PM, which is the time when the trading on the Belgrade Stock Exchange ends, the price of shares grew by 0.2%, that is, by RSD 1.

At the usual opening time, 1,300 post offices in Serbia opened their desks for provision of free services to the citizens who want to sell the shares of NIS. Let us remind that five free shares of the first company from the basket of six public companies have been given to 4.8m citizens of Serbia.

Although we got used to long queues on the first day every time something is given for free or facilitates an income, there were no significant crowds in the post offices today.

As Beta agency learns, the post offices received 34,000 orders for sale of free shares of NIS until noon.

Svetlana Lesevic, the Director of Cash Services at Poste Srbije (the Postal Company of Serbia), said at the press conference that 15,002 orders for sale had been received until 9.30 AM.

She added that the reception of orders would be resumed and that the orders received after 9.30 AM would be forwarded the next day.

How and whether to cash the shares?

In order to place an order for sale of the shares of NIS, a citizen need to bring ID card to the desk in a post office where a clerk will check the state of his or her shares, after which an agreement will be concluded with the client.

The citizens need to know how many shares they want to sell and at what price, and they also need to have an active checking account to which the money will be paid within three days in the case of realization of the order.

Orders for sale of free shares can be submitted between 8 AM and 7 PM. All orders received before 9.30 AM will be forwarded to the Stock Exchange on the same day, while the orders collected by the end of the working hours will be forwarded the next day.

According to the rules of the Stock Exchange, the price at the end of the first day of trading is the starting price on the next day, while the price of shares can drop by up to 8% or grow by maximum 10% every next day.

Although it is clear to everybody that nothing will come out of the promised 1,000 euros, it seems that, at this moment, the citizens are bothered the most by the question if they should hurry with the sale and be satisfied with about RSD 2,500 or wait for some better days.

(Vladan Rankov)

Vladan Rankov, an analyst at broker company KBC Securities, recommends to citizens as minority shareholders to sell the shares if they get the expected RSD 500 per share, unless they are willing to wait for a long time to get a higher price.

- At this moment, judging by the results and expectations, higher price of shares does not justify the business results of the company, which is why I recommend the sale - Rankov told eKapija.

And what if you want to buy shares?

Those who want to buy the shares of NIS can do that through broker companies, with which they should sign an agreement and open a restricted-purpose cash account. Then it is necessary for them to pay the money for trade and place an order for purchase. The broker's fee amounts to about 1% of the market price of shares.

Also, since the shares of NIS will be traded in the same way as all other shares in Prime Market (the shares of Energoprojekt, Tigar, and Sojaprotein), the shares can also be donated, but the tax on capital profit must be paid in that case.

Better days for Serbian capital market?

Financial workers have been waiting for a long time the issue of shares of former giants of Serbian economy sector. Are the shares of NIS going to put Serbian capital market in motion and breathe a little life into it?

"The very appearance of large companies on the Belgrade Stock Exchange should also mean the entrance of domestic capital market to the map of serious European stock exchanges since we have had very little to offer to global portfolio investors over the last seven or eight years of transition - Nenad Gujanicic, the main broker at Sinteza Invest Group, told the media.

"In addition to the offer of shares of large corporations", Gujanicic adds, "their appearance may also raise the level of transparency of local market whose rules have been porous all these years and subject to selectivity, the same as in all other fields in our country".

The opinion that the trading in shares of NIS should have a positive influence on activities on the Stock Exchange is also shared by Rankov.

- Larger offer of shares and big number of small transactions should be expected in the first days of trading. Foreign institutional investors should become active once large blocks are formed – says the analyst from KBC Securities.

Losses registered by NIS: lies and truths

The capital of NIS amounted to 22.6 billion dinars at the end of June, which means that the share's accounting value is RSD 138.

- In the first half of 2010, NIS registered losses in amount of RSD 9.6bn, 29% more than in the same period in 2009 - it was announced on Friday on the occasion of presentation of NIS on the Belgrade Stock Exchange.

When asked by eKapija if the reported losses of the company were going to have a negative influence on the price of shares, Rankov said:

- Speculative trading at start may have a bit higher price than the fair value as a result, but the recently announced results and the series of the company's losses will definitely have a negative effect on the price that will be formed the first. Uncertainty concerning the future operations of the company, and particularly the speed at which Gazprom will manage to bring NIS to the level of profitability that justifies higher price, will be the basic reason for caution among professional investors. It should be expected that the price corresponds to the level of RSD 500, which is expected to be paid by Gazprom to minority shareholders prior to March 2011 in accordance with the signed agreement.

Information for citizens

All citizens can get detailed information on the sale of free shares by calling the Info Center of the postal company, by visiting the websites of the Postal Savings Bank (www.posted.co.rs), Poste Srbije (the Postal Company of Serbia) (www.posta.rs), the Privatization Agency, the Belgrade Stock Exchange (www.belex.rs), as well as by paying a visit to the post office that issued the order, or by sending text messages.

The Stock Exchange will also offer to send the citizens a text message with the information on the current price of shares during the trading, the percentage change in the price when compared to the starting price on the day, as well as the volume of trade up to that moment. The price of text message is RSD 15, VAT included.

J.Đ.