Stario surges as it changes hands
Cyprus investment company losses narrowed to only EUR 18 mln in the first quarter of 2009 following the rebound in equity prices since they touched their all-time low on March 6. But on a year-on-year comparison, the losses continued to be significant.
According to the exclusive survey carried out by the Financial Mirror, total assets of the 17 investment companies listed on the Cyprus Stock Exchange amounted to EUR 405.74 mln as at end of March, down by a whopping EUR 202.9 mln compared to March 2008 levels.
Nevertheless, compared to the end December 2008 total of EUR 423.8 mln, the decline in the first quarter was only EUR 18.11 mln, which has already turned into positive territory, since equity prices led by the banks in which all investment companies are heavily invested, continued higher in April.
Interfund the worst performer
Among the major funds, or those with assets exceeding EUR 20 mln, Interfund was the worst performer since its net asset value (NAV) fell by a whopping 60.7%, far exceeding the 19% loss of Demetra, the largest fund.
On a portfolio that a year ago amounted to EUR 64 mln, Interfund lost EUR 39 mln, with its total assets as at March 2009 amounting to only EUR 25 mln.
Demetra the largest
Demetra remained the largest fund with EUR 186.3 mln in assets, diversified between equity, cash and property investments in Cyprus and abroad. Trading at EUR 0.24 per share on the CSE, the discount to NAV of EUR 0.9127 as at March 2009 widened to a record 73.7%.
Athena, which is majority owned by Hellenic Bank, remained the second largest fund with total assets of EUR 44.8 mln as at end of March, with its traded price discount to NAV at 56%.
Cytrustees, majority owned by Bank of Cyprus Group, was the third largest fund with total assets of EUR 28.8 mln. Trading at EUR 0.52 on the CSE, the discount to NAV of CYTR was 48%.
Stario surges
Stario recorded the highest increase in its share price as its shares surged 250% to EUR 0.21 from below EUR 0.04 levels after the Aspis Holdings Group and other investors secured effective control of the company from the Elma Group.
Stario is the 14th largest fund with total assets of EUR 1.6 mln as at March, but two privately owned companies and Aspis Holdings paid a total of EUR 1.87 mln to acquire control of the company in February and March. The deep discount to NAV and the fact that all its assets were invested in liquid and easy-to-dispose-of holdings, possibly attracted Aspis and other investors to bid for the company.
Based on the latest closing price on the CSE, Stario is trading at a 162.5% premium to its NAV of EUR 0.08.
Other small funds such as Harvest, Finikas and Triena are also trading at premiums to their NAV, whereas the rest of the 17 investment companies are trading at discounts of up to 79% to their NAV.
Companies that have liquid or easy-to-liquidate assets and where ownership is already concentrated with one or two particular groups and are trading at a deep discount to their NAV, are most likely to be the next takeover targets.
The Financial Mirror survey does not include dividend payments made by companies in the NAV performance calculations, even though such dividend payments could result in a reduction of a company’s NAV.
