The Bulgarian Stock Exchange (BSE) has chosen to adopt Deutsche Boerse’s (DB) trading platform, a spokesperson from the BSE said on September 25. In a statement released on September 26, BSE board of directors said they had selected DB’s offer after taking into account both the technological and financial parameters of the DB offer and that from Scandinavia’s OMX.
BSE had the luxury of making its own decision rather than having to look for willing candidates. At least this was according to BSE’s chairman of board of directors, Viktor Papazov. On September 25, Papazov attended a conference organised by Bulgarian-language daily Dnevnik and SeeNews wire agency.
“The choice of a possible strategic partner for the BSE is no longer connected with the need for a platform. The BSE already has enough free resources to invest in such a trading system, which was not the case few years ago,” Papazov said. Indeed the positive development of the BSE over the past three years has made the BSE attractive for foreign capital and the BSE can now afford to make its own choices. Proof of the positive trend at the BSE was that 2007 was the first year, since the BSE was re-established in 1991, that its share holders were given dividends for their shares. Every share holder received 0.25 leva a share or 1.5 million leva in total. This figure equalled 90 per cent of the positive financial result of the BSE for 2006.
One of the reasons for looking for a trading platform, according to Papazov, was that the Bulgarian market should open to foreign capital. “Its access to Bulgarian stocks should be cheaper and more efficient,” Papazov said. One of the ways to ensure BSE’s integration into the European capital market is the planned sale of the government’s 44 per cent stake in the BSE. The Bulgarian Government has said it plans to sell its stake in BSE to a strategic investor by the end of this year. Papazov said the adoption of a new trading platform, rather than the sale of the state stake in the BSE, will be the priority.
“We are providing a technical platform as well as operational services, giving access to all the investors connected to our market to other markets like Dublin, Vienna or Shanghai so that is a model which might be useful for the BSE and which we have proposed to the board of directors of the Bulgarian Stock Exchange,” DB senior vice president Jochen Biedermann told SeeNews. OMX and DB have previously expressed interest in establishing strategic partnerships with the BSE, alongside Borsa Italiana, Vienna Stock Exchange, Athens Stock Exchange and Prague Stock Exchange.
The BSE has recently attracted great interest from foreign investors who became more comfortable investing in Bulgaria after its entry in the European Union in January. DB has offered the BSE its Xetra platform, which is used by the stock exchanges in Dublin and Vienna, Biedermann said. “We are now discussing the Xetra platform because of the current needs but there are also opportunities to discuss further services in the next years when the opportunity comes up, when the demand on the Bulgarian Stock Exchange increases,” he said.
While the leadership of BSE was busy making its choice, the BSE indices hit another record high on September 24 for an eighth session running, despite a lower turnover. The Sofix index of the 17 blue chip companies on the BSE increased 0.24 per cent to 1785.61 points, while the broad BG40 index added 0.44 per cent to finish at 498.04 points. Drug maker Sopharma and car battery maker MonBat were among the major gainers, which helped the two indices rise. Sopharma ended at 7.66 leva, up 1.9 per cent from the previous close, on a volume of about 89 600 shares, while MonBat gained 5.2 per cent to 25.94 leva with about 28 450 shares changing hands.
Shares in holding company Severcoop Gamza, which were on the rise until the middle of last week, continued to lose ground. Severcoop Gamza closed at 4.5 leva, down eight per cent, on a volume of about 4080 shares. On September 24 a total of 86 shares rose, 61 fell and 20 remained unchanged. BSE’s BG TotalReturn30 (BG TR30) index, including companies with a free float of at least 10 per cent having equal weights in the index, added 0.14 per cent to 1117.03 points. The BG REIT index, which tracks the performance of real estate investment trusts traded on the BSE, gained 0.71 per cent to 101.80 points. BSE’s total turnover fell to 10.8 million leva from 14.1 million leva on September 21.
