STK Emergent is targeting double profit in spite of stock exchange drop

STK administrators say they will not modify forecasts made prior to the launching of the IPO, even if the capital market maintains a downward trend. The investment fund “almost entirely” abandoned investing in smaller companies in favor of blue chip investments.

STK Emergent’s profit target is some RON 100 mln (€26.86 mln), 6.5 percent higher than last year.

“The planned profit for 2008 is based on existing investments within the fund. We have no reason to diminish expectations. The money raised through the IPO helps us to feel a bit more comfortable about the profit target, which means that the RON 27.2 mln target was predicted for a higher number of fund units, and now, following the IPO, in order to maintain the same level of payment a profit of RON 22 mln is sufficient,” said Nicolae Pascu, President of STK Financial, the company that administers the STK Emergent fund.

The fund will not give cash dividends this year. The strategy is to capitalize the profit in the first four years following the listing.

Pascu says that investments in financial investment company (SIF) shares, the most important portfolio asset at the end of 2007, but also the shares subject to the highest losses at the beginning of this year, were due to yield profit in two years.