The CEO of Erste Invest, Josip Glavaš, believes that due to the crisis in global markets and the overvaluation of INA’s shares compared to other companies in Southeast Europe, as well as the potential exit of a larger number of veterans with their shares, selling to MOL at a price of 2,800 kuna represents the best solution.
– Erste-invest has proposed to the Management Board of the Fund for Croatian Veterans the sale of INA shares due to the situation in global capital markets that has also reflected on our market, the current and future liquidity of the Fund, based on a comparison of the relative values of INA and other oil companies in Southeast Europe, and considering alternatives for not accepting MOL’s offer – stated Josip Glavaš for Lider. He also added that INA’s share price during this year, when the global market was not yet in such a severe crisis, touched a price of 2,050 kuna.
Recent events in the USA have spilled over into other global markets, including Croatia, believes Glavaš.
In the meantime, speculation about the further privatization process of INA has emerged, which has raised the price to as high as 3,100 kuna per share. However, recent events in the USA have spilled over into other global markets, including Croatia, believes Glavaš, and what drives the global, as well as the Croatian capital market, is the issue of liquidity, not the current fundamental value of individual companies.
‘Erste-invest, together with the Management Board of the HB Fund, is obliged to ensure its current and future liquidity so that all Fund members who request payment of their shares can receive their money’.
– Erste-invest, together with the Management Board of the HB Fund, is obliged to ensure its current and future liquidity so that all Fund members who request payment of their shares can receive their money. Additionally, the comparison of oil companies in Central and Eastern Europe with INA, which has been conducted from our side, as well as from the side of other analysts covering this region, yields a result indicating that INA is relatively the most expensive oil company in this part of Europe – says Glavaš about INA’s current price.
– And finally, but perhaps most importantly considering all that has been said, we believe that this is the best alternative at this moment. Namely, not accepting MOL’s offer for INA shares in the current crisis situation in global capital markets, when the HB Fund is indebted, and the fact that relative indicators suggest that INA is significantly overvalued at this moment, would result in the HB Fund having to sell those same INA or T-HT shares on the stock exchange in the near future. This would contribute to a decrease in the value of the Fund, as the sale of INA and T-HT shares on the stock exchange by the HB Fund would certainly, under such or similar conditions, be pouring oil on the fire. In other words, the price we would achieve would likely be much lower – states Josip Glavaš in an extensive explanation of why he, as the only expert in the Veterans Fund, proposed accepting MOL’s offer.
