The Financial Supervision Commission (FSC) was the most active player in the last full working week of the year. On December 18 the FSC said it had imposed fines on three more brokerages for breaking the rules of the initial public offering (IPO) of Trace Group Hold (TGH), the first road construction company to float shares on the Bulgarian Stock Exchange (BSE). The three brokerages in question were Somoni Financial Brokerage, United Bulgarian Bank (UBB) and BenchMark Finance. They received statements of violation and recommendations for how to accept orders for huge quantities of shares in the future.
On November 23, Karoll, Elana Trading, Aval In and Fina S were fined. They were accused of acting against their clients’ interests and undermining the stability of the financial market. It all happened on November 15 when TGH’s shares were oversubscribed by nearly 1500 times, which was close to a world record.
On December 17, the FSC was again in focus. It launched a probe into a deal of 706 000 shares in agro-holding company Zarneni Hrani Bulgaria (ZHB). The reason was that the deal started three days earlier than scheduled. The deals were brokered by Postbank, Real Finance, Somoni Financial Brokerage and Positiva. The debut of ZHB on the BSE reached an average price of 4.40 leva a share on December 17. The value was 2.22 per cent lower than the price achieved during the IPO, which was 4.50 leva.
All the 25.6 million shares offered by ZHB were subscribed, the lead manager of the issue, Central Cooperative Bank, said. As much as 15 per cent of the capital was distributed among local clients, the issue was oversubscribed by 2.52 times. Foreign investors received 10 per cent of the capital. ZHB reported a consolidated profit of 6.35 million leva for the first nine months of 2007 and revenue of 52.17 million leva. The expected net profit for the year is 12.97 million leva. In 2008 the company plans to put a biofuel plant into operation with a capacity of 100 000 tons a year.
In general most stocks fell on December 17, amid selling pressure by small investors, and the market was seen volatile until the end of the year, brokers told SeeNews wire agency.
The blue-chip Sofix index, which is made up of the 16 most liquid stocks on the BSE, fell 0.71 per cent to 1703.94 points, while the broad BG40 index added 0.35 per cent to 506.52 points. The BG REIT index, which tracks the performance of real estate investment trust shares, fell 0.19 per cent to 98.81 points and the BG TotalReturn30 index, in which companies with a free float of at least 10 per cent have equal weight, lost 0.41 per cent to end at 1066.30 points.
