The Bulgarian Stock Exchange (BSE) saw another jittery week with low trading volumes and most shares falling. On March 10, the Sofix index, which tracks the 16 most liquid shares on the BSE, fell 1.82 per cent to end at 1324.38 points and the broader BG40, which tracks the 40 most traded shares, decreased by 2.46 per cent to 367.63.
The lull on the exchange came after another slow week. Analysts believe that the bearish sentiment of investors will continue for several more months.

Despite the poor market conditions, meat processing company Mekom AD finalised the subscription share offering at the minimum asking price of 2.20 leva a share and just met the threshold to be able to call the initial public offering (IPO) successful. Investors subscribed to 2.604 million shares or 24.4 per cent of the total offering; the threshold was set at 2.5 million shares. The proceeds of the IPO reached 5.728 million leva. Mekom is due to stage its IPO at the end of April. Mekom was the first-ever company to extend subscription to its IPO after flagging investor interest.

In another “first ever”, Varna-based food producer and processor Agria Group became the first debutant on the exchange to report losses on its maiden trading day.
Meanwhile, the BSE announced changes to the composition of the Sofix and BG40 indices. From March 13, the Sofix started tracking the 20 blue chips on the market, instead of 16. Petrol was removed from the index and replaced by Corporate Commercial Bank, First Investment Bank, the Kurdjali-based Lead-Zinc Complex and Holding Putishta.

The new entries in the BG40 were Moststroy, Corporate Commercial Bank, Devin, Aroma, Elhim Iskra and Lomsko Pivo. The companies to leave the index are Alcomet, Oil and Gas Surveying and Extraction, Favorit Hold, Polymers, EMCA and Decotex.

According to Tsvetoslav Tsachev, lead analyst at Elana brokerage, the change to the Sofix made it more indicative of the sectors represented on the BSE, yet he said it was still too heavy on financial institutions. “Four of the five public banks feature in the Sofix,” Tsachev said. The index would have been even more representative if it had included developers such as Enemona and a chemical company such as Neochim, he said.

Nikolai Kostov, chief executive of the FFBH Asset Management, also said the rebalancing of the two main indices made them more inline with the current realities on the BSE.