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Impact sheds 50 percent of its market value in Q1, 2008

The stock of Impact Developer & Contractor (IMP), the only real estate developer listed on the first tier of the Bucharest Stock Exchange (BVB), has lost about 50 percent since the beginning of the year, the sharpest fall on the BVB.

Impact shares were listed at 0.5 lei at the end of 2007, but their price has gone down to around 0.25 lei over the last few days. The index of the top ten companies on the Stock Exchange, BET, which also includes Impact's shares, lost 25 percent during the same period. 'The main culprits for the drop in shares are speculative foreign funds, as well as local investors. Large foreign funds that have long-term commitments to the company don't care too much about such momentary declines,' Dan Ioan Popp, Impact chairman, told Ziarul Financiar. Impact's value has declined by around 65 percent since mid July; a decline that started with the onset of the subprime credit crunch on the US market, which caused significant declines on the capital markets. Analysts say that the stronger decrease of Impact's shares compared with the rest of the market follows the trend of the shares of real estate companies worldwide, which were the most affected by the financial crisis, along with financial sector companies. Still, analysts add that the decline of Impact shares was due in part to the operating results the company reported last year that fell below expectations, despite the high profit derived from the reassessment of property. The decline of Impact shares has hit foreign investment funds that invested in the company last autumn such as Lehman Brothers and Julius Baer, which lost more than 60 percent of the amount invested at the time. Austrian fund Immoeast, the most powerful buyer on the Romanian real estate market has lost about 40 percent of its market value over the past eight months, and the price of its shares has fallen from 10 to 6 euros. Sursa: http://www.rompress.ro

Tags: shares impact value percent market bet bvb

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