The new year started quietly for the Bulgarian Stock Exchange (BSE). This was in marked contrast to the end of 2007 when the BSE was in apparent turmoil and over the course of an hour the stock prices of many companies lost an average of 10 per cent. This was because of the decision of the pension funds of Germany’s Allianz to withdraw 38.7 million leva from mutual funds held in Bulgaria, which drained liquidity from the market on December 19.
Allianz’s decision was important because of the fact that the turnover of the BSE rarely exceeds three million euro a day. As soon as the market opened on December 19 about 80 per cent of the listed stocks began to fall. It became a domino effect; other companies followed and a massive sell of shares was started with companies loosing from five to 15 per cent of stock value. Fortunately it all lasted for only an hour and the market soon stabilised. It gave more than enough time for some players to make profits, however.
On January 7 the BSE resumed its usual pace. The blue-chip Sofix index, which includes the 16 most liquid stocks on the BSE, slid 0.77 per cent to 1692.67 points and the broad BG40 index lost 1.48 per cent to 499.96 points. “Nothing interesting happened because the market is still asleep after the holidays,” Ilian Scarlatov, a broker with Sofia International Securities, told SeeNews wire agency. “The market was down, however the volumes are thin, which was a reassuring fact.”
Total turnover on the BSE on January 7, excluding block trading and other pre-agreed deals, rose to almost 32 million leva from 14.3 million leva on January 4, boosted by two large deals in shares of Corporate Commercial Bank (Corpbank) and Central Cooperative Bank (CCB). A total of 26 585 shares in Corpbank changed hands on January 7 at an average of 96.8 leva. Corpbank shares closed at 96.8 leva, down 1.12 per cent. A total of 1.433 million CCB shares changed hands at an average price of 10.65 leva. CCB ended two per cent higher at 10.1 leva. A total of 57 shares rose, 48 fell and 13 closed unchanged.
The BG TotalReturn30 (BG TR30) index, in which companies with a free float of at least 10 per cent have equal weight, fell 0.45 per cent to 1070.14 points. The BG REIT index, which tracks the performance of real estate investment trust shares, was down 1.53 per cent, finishing at 104.65 points.
In other news the Bulgarian unit of Greek builder Domokat decided to float its entire registered capital of 1.69 million leva on the BSE. The capital will be divided into the same number of shares, the company’s secondary offering prospectus, drafted by Capman brokerage, said, as quoted by Bulgarian-language Dnevnik daily. Domokat will offer 1.69 million shares at an issue price of three leva each in a bid to draw a broad range of investors and form a price of its shares. January 10 was set as the start date for the offering. Greek registered Domokat AE controls 99.716 per cent of the company and individual Hristos Mouroutis holds the remaining 0.284 per cent.
Domokat is building the luxurious residential complex Panorama in Sofia’s Dragalevtsi neighbourhood. It has, so far, spent three million leva on the project and is expected to spend a further seven million leva by the time the project is completed.
Sopharma Trading, the distribution arm of Bulgarian blue-chip drug maker Sopharma, is also planning to list shares on the BSE. The offer is expected by the end of this month, a Sopharma Trading senior official said on January 7. Sopharma Trading, created through the merger of five drug distribution companies in 2006, received regulatory approval in the first week of January to list its registered capital of 30 million leva, divided into shares with face value of 1.0 lev, on the BSE.
