Turnover of the Bulgarian Stock Exchange (BSE) surged threefold on the year to 9.95 billion leva in 2007, the BSE said in a report published on March 21. The report, which focuses on current trends and strategies for the bourse's development through 2010, comes amid the enduring bourse downturn in the past few weeks.

The capital market boomed over optimistic moods related to Bulgaria's accession to the European Unions, as well as the surge of investments from abroad, the versatile activity on the bourse and the more active behaviour of market participants, the report read.

Another growth factor proved the corporate tax cut from 15 to 10 per cent, boosting financial results and reducing the grey economy.

On the official segment, turnover grew by 250 per cent compared to 2005, despite the restructuring of the segments at the beginning of 2007. The unofficial segment reported a 600 per cent increase to 6.5 billion leva.

The bond market experienced a milder increase, by 48.5 per cent over the figure recorded in 2005 - to 374 million leva. The share of this segment in the BSE total turnover remained unchanged at 3.76 per cent. The number of bond issues during the period in review rose from 55 to 87.

Between 2005 and 2007, the BSE reported a surge in the number and average size of block and other contractual transactions. In 2005, the BSE settled deals worth 1.01 billion leva, while in 2007 their value reached 1.33 billion leva. In 2005, block and other contractual deals accounted for 28.25 per cent of total turnover, while in 2007 they represented only 13 per cent, according to the report.

During the period in review, the number of clients of Cobos, the internet-based system for trade on the BSE, rose tenfold in to 5142. The growing popularity of Cobos became one of the landmarks of this period, the report reads. In the three years to 2007, the percentage of bids made through the system rose from 40 per cent to 70 per cent of total bids. The number of deals settled through the system surpassed 80 per cent.

Nonetheless, the value of deals struck through Cobos remained negligible because the system is used mainly by retail and individual clients. While in 2006 the volume of Cobos-processed deals was 10.76 per cent of the entire volume, in 2007 it was at 11.59 per cent.

The Sofix blue-chip index reported its all-time high in October last year, reaching 1952.4 points, a whopping 87 per cent year-on-year increase, as did the broader BG40, reporting a 243 per cent year-on-year increase to 619.9 points.

The free float of BSE-traded shares came in at 24.73 per cent, against 17.89 per cent a year earlier.

Market capitalisation also recorded a substantial increase, rising by 112 per cent for the 12 months ended in December 2007.

The period witnessed 85 equity hikes, including 54 by real estate investment trusts (REITs) and one by an investment holding. The aggregate nominal increase of capital hikes rose by 55 per cent to 600 million leva. The number of initial public offerings (IPOs) in 2007 was 11, REITs excluded, which raised 350 million leva.

A short-term goal of the BSE is to launch the XETRA trading platform, used by the Frankfurt stock exchange. XETRA trading is expected to start in the middle of 2008. Another goal is to optimise the Cobos system after discussions with the investment intermediaries.

The strategy for capital market development also foresees the increase in the number, volume and diversity of BSE-traded financial instruments through the attraction of foreign issuers willing to trade their shares on more than one bourse, the encouragement of the issue of bonds, the change to the trading regime of the least liquid companies and the encouragement of capital formation through the bourse.