Just one per cent of the population in Bulgaria is well informed on what exactly an investment fund is and what are its advantages, according to research by GFK, requested by Raiffeissen Capital Management.
Only five per cent of the people interviewed were “somewhat” informed and 11 per cent said that they were not sure whether they were informed. Another 29 per cent said that they did not know enough on the matter, and 55 per cent said they did not care at all. A little more than one third (36 per cent) of those who showed interest said they saw investment trusts as safer than investing in stocks, while 28 per cent said they favoured a more up-to-date way of investing. One in five preferred the funds because someone else would take responsibility and they would not have to deal with the matter. Seven per cent of respondents said the funds brought high returns.
The research also found out that most people in Bulgaria were saving for unforeseen circumstances (14 per cent), for the future of their children (10 per cent), or simply to be able to support their family (nine per cent). Fewer people saved in order to “be able to afford something at a latter stage in life” (seven per cent) and for retirement (five per cent). When considering issues related to savings, investment and loans, Bulgarians usually consulted their families (55 per cent), friends (36 er cent), or relied on information from radio and TV (26 per cent). Fewer people said they relied on financial sources, co-workers, newspapers or magazines.
Despite the research’s results, the Bulgarian Stock Exchange (BSE) continued its positive trend of reaching new highs on September 18. Stock indices hit highs for a fourth day in a row helped by a boost in liquidity following the end of the summer period, brokers said. The Sofix index of the 17 blue-chip shares on the BSE rose 0.82 per cent to a fresh high of 1701.15 points, while the broad BG40 index gained 2.55 per cent to a record high of 474.59 points.
“The holiday period is over and most investors are back, which contributed to the rise of liquidity and positive sentiment,” Tsvetelina Ivanova, a broker with STS Finance, told wire agency SeeNews. She said that the trend was likely to remain upward for a week.
Shares in paint and varnish producer Orgachim, which have supported the rise of the two indices in the past few days, extended their gains on September 18, closing five per cent higher at 572 leva in volume of 440 shares, Ivanova said.
Among the strongest gainers were hydraulic equipment maker M+S Hydraulic and diversified holding company Severcoop Gamza.
The BG-REIT index tracking the performance of real estate investment trusts traded on the stock exchange lost 0.85 per cent to 99.32 points.
On the banking front, shares in Economic and Investment Bank (EIBank) closed 11.5 per cent higher on September 18 on news of a possible takeover by Belgian financial group KBC or Spanish bank La Caixa. EIBank rose significantly, by more than six per cent, after media reports of talks with two potential majority owners. EIBank shares closed at 145 leva, up 11.5 per cent and their average weighted price rose by 6.2 per cent to 141.7 leva in volume of about 760 shares. Media reports on September 17 said that EIBank was in talks with the two potential buyers to sell a majority stake, saying the winner was likely to be chosen within a week or two.
EIBank is 48.63 per cent owned by Novator Finance Bulgaria, a company of Icelandic tycoon Thor Bjorgolfsson. The bank was the ninth largest bank by assets in Bulgaria at end-July. It reported a 20.6 per cent year-on-year fall in net profit for the first half of 2007 to 16.9 million leva.
