Patria has changed its RIF recommendation, from reduce to hold.
The main reason for our downgrade from accumulate to reduce on June 14, 2000, was the risk stemming from IPB stocks and bonds in RIF’s portfolio (then 4.9% and 3.9% of NAV). Since then, IPB stock was suspended, the bank was put under forced administration, and its assets and liabilities was sold to CSOB. RIF manager has de facto revalued IPB stock holdings to zero. RIF’s stock price in our view reflects the negative impact on NAV due to the IPB stock revaluation. IPB bonds are subject to a CNB guarantee issued on June 15. Given the current price, NAV, and a discount of around 9%, we now believe shareholders should hold RIF until opening.
The opening has been delayed by a minority shareholder’s legal action. A shareholder meeting is preliminarily scheduled for the end of August, and no breakthrough should be expected by then.
Our change of recommendation was released today, in the latest Czech Equity Market Focus. The current RIF price is CZK 1,432 per share.