market WRAP-UP
The market recovered on Wednesday as the indices advanced supported by more aggressive buyers. In the last days of the month everybody was expecting the Q2 financial statements which in general turned out to meet the investor’s expectations. Still the positive news from the reports didn’t seem to be enough to generate strong demand. Instead, it appeared that everybody is just using the opportunity to sell some shares. At the end SOFIX closed at 1023.26 (+1.66%), BG40 advanced 0.50% to 257.29 bps and BGTR30 moved 1.48% up to 677.47. The major moves came from Sopharma (3JR, BGN 4.88, +10.91%) where more than 93k changed hands, Industrial Holding Bulgaria (4ID, BGN 6.25, +6.73%) with more than 32k traded, and Monbat (5MB) which moved 4.92% up to BGN 10.59. Among the top losers were Orgachim (5ORG, BGN 193.799, -5.00%) and Albena (6AB, BGN 60.22, -5.91%) which both suffered from low liquidity.
| Sofix | BG 40 | BGREIT | BGTR30 | |
| Value | 1 023.26 | 257.29 | 88.74 | 677.47 |
| 1-day change (%) | 1.66 | 0.50 | -0.11 | 1.48 |
| 7-day change (%) | 0.01 | -1.48 | -1.18 | -1.14 |
| 90-day change (%) | -10.12 | -19.20 | -7.26 | -13.10 |
| 365-day change (%) | -34.81 | -32.50 | -11.26 | -32.25 |
Note: BG REIT and BG TR30 started 31 August 2007
| BSE Daily Volume (shares) | 1 460 078 |
| BSE Daily Volume (BGN) | 5 139 633 |
| Avg Daily Turnover YTD (BGN) | 12 715 661 |
| Avg Daily Turnover 12 mo. (BGN) | 34 156 334 |
Most recent macro data
| Inflation (HICP, M/M June) | 0.5% |
| Inflation (HICP, cum. 2008) | 5.7% |
| LEONIA Reference Rate | 5.21% |
| SOFIBOR /3 months/ | 7.294% |
| GDP Growth (Y/Y Q1 2008) | 7% |
| Unemployment (June 2008) | 5.97% |
exchange rates
| Current | Change | |
| BGN/USD | 1.25462 | 0.00927 |
| BGN/EUR | 1.95583 | Fixed |
| EUR/USD | 1.5589 | -0.0116 |
DAILY TRADING (selected stocks) (table)
All figures in BGN (BGN/EUR rate fixed at 1.95583)
Compensatory Instruments (table)
ECONOMY AND POLITICS
Macroeconomic news and statistics
Bulgaria household wealth growth outpaces inflation
The financial wealth of Bulgarian households stood at over BGN 32bn by mid-2008, up 23% YoY, 55% of GDPe and ahead of inflation which stood at 15.3% YoY according to official NSI data, announced research and analysis organization industry Watch. From it nearly BGN 10bn are bank loans and leases.
Home wealth is by far the biggest asset of Bulgarians standing at BGN 143bn at H1 2008, up by 72% in the last two years. Homeowners in Sofia account for 1/3 of the figure.
Nearly 90% of the savings of Bulgarian households are in bank deposits and in idle cash. Just 3.6% of Bulgarians' wealth is invested in shares and only 1% is invested in mutual funds.
The total wealth of households (financial and real estate) is up to BGN 175bn as of end June 2008.
Source: Dnevnik
Financial sector
In H1 total loans of the banking system increased by 15% YtD to BGN 51.5bn, net profit was BGN 729m (up 49% YoY)
At the end of June the total assets of the banking system came up to BGN 65.7bn (up 11% YtD). Total loans reached BGN 51.5bn (up 15% YtD) while loans to non-financial institutions came in at BGN 43.7m (up 21% YtD). The asset quality remained sound. In Q2 of 2008, non-financial institutions, individuals and households remained as the main source of financing. Retail deposits were BGN 20.9bn and accounted for 36% of total attracted resources in the banking system. They were approximately equal to the funds attracted from institutions other than credit ones (BGN 20bn or 35%). The net profit realized by the banking system was BGN 729m (up 49% YoY) in H1 of 2008. The capital adequacy ratio stood at 14.55%. The liquidity measured through the liquid asset ratio was 24.01%, and its level can be assessed as good.
Source: BNB, FFBH
Macroeconomic news and statistics
State and state-guaranteed debt at EUR 5.3bn in end June
State debt as of end June was EUR 4.7bn (15% of GDPe), shows data of the Ministry of Finance. Domestic government debt was EUR 1.6bn and external government debt was EUR 3.1bn. In nominal terms the debt declined by EUR 18.5m compared to the previous month, which is due mainly on differences in foreign currency exchange rates. State guaranteed debt remained flat at EUR 567m (1.8% of GDPe) at end June.
Source: Dnevnik; FFBH
CORPORATE news
Holding Roads AD [6H2]
Holding Roads H1 2008 unconsolidated sales grow 63% YoY
Holding Roads unconsolidated sales grew 63% YoY to BGN 34m in H1 2008. EBITDA margin however remained the same as last year (1%) as the lower use of subcontractors (cost of hired services) was fully offset by the higher in-house production (cost of materials) and growing materials and energy prices. In H1 2008 Holding Roads recorded a BGN 25k unconsolidated net profit (BGN 325k net loss in H1 2007) coming from positive net interest income of BGN 0.7m compared to BGN 0.2m net expense in H1 2007.
On the balance sheet unconsolidated IB debt kept on growing and reached BGN 110m up from BGN 75m in end-2007. IB debt-to-equity ratio reached 3.1x in H1 2008 from 2.1x in end-2007. Non-cash working capital has doubled during the first 6 months of 2008 and reached BGN 59m. The deterioration was mainly caused by BGN 20m increase in receivables from HDPAT subsidiaries.
Source: FFBH
Olovno tzinkov komplex AD [5OTZ]
Lead and Zinc Complex revenues from operations drop by half, the bottom line decreases more than ten times Lead and Zinc Complex revenues from operations dropped approximately in half from EUR 62.1m in H1 of 2007 to EUR 35.3m in H1 of 2008. The decrease was due to the reduction in prices of both zinc and lead in the last one year and the quantities sold. The sales of lead dropped by 35% YoY while those of zinc by 20% YoY thus implying that the management is still betting on an increase in the prices of its products on the commodity exchanges. The stockpiling of lead and zinc has lead to a jump in firm’s inventories by 22% in the first half of the year from EUR 39.1m at the end of 2007 to EUR 48.2m in H1 of 2008. This increase in current assets has been mainly finance by account payables which went up 38% from EUR 24.2m at the end of 2007 to EUR 32.3m in H1 of 2008. Despite the severe reduction in revenues OTZK has managed to record a profit of EUR 0.98m in H1 of this year (from EUR 7.3m in H1 of 2007) due to a non-operating revenue of EUR 5.8m.
Source: FFBH
First Investment Bank [5F4]
FIB in H1: Loans unchanged YtD; Net income up 24% YoY
FIB reported H1 unconsolidated results with virtually unchanged total assets of BGN 4bn and loans to non-financial institutions /NFI/ of BGN 2.8bn on an YtD basis. Deposits from NFI declined 1% QoQ to BGN 2.8bn. The net interest margin slightly improved YoY and reached 4.7%. Net income came in at BGN 24m (up 24% YoY).
Source: FFBH
Central Cooperative Bank AD [4CF]
CCB in H1: Strong loan portfolio expansion; Net income declined on loss from securities
In H1 Central Cooperative Bank reported total assets of BGN 1.6bn (up 3% YtD), loans to nonfinancial institutions /NFI/ of BGN 815m (up 24% YtD) and deposits from NFI of BGN 1.4bn (up 3% YtD). Net income reached BGN 6.9m (down 26% YoY).
Source: FFBH
Bulgarian American credit Bank AD [5BN]
BACB issued a 3-year 7.25% mortgage bond for EUR 35m
On Tuesday BACB issued its sixth mortgage bond. It is a 3-year EUR 35m bond with fixed semiannual coupon payment of 7.25%. The bank plans to use the proceeds to refinance its existing debt obligations as well as to fund loan portfolio expansion.
Source: FFBH
Insurance company Euro Ins AD [5IC]
EuroIns reported solid growth in GWP, net income plummeted YoY in H1
EuroIns reported a 44% YoY increase in gross written premiums to BGN 38m in H1. The gross loss ratio improved by 2pp YoY to 34.8%. Due primarily to higher operating costs and loss from on investments the net income came in at BGN 340K compared to BGN 2.3m in the year-ago period. Insurance reserves increased by 18% YtD.
Source: FFBH
Doverie-Obedinen Holding AD [5DOV]
A one-off income from dividends boosts the net profit
Doverie United Holding H1 unconsolidated net income was BGN 5.3m, up 13x YoY, coming from a one-off income from dividends of BGN 5.4m distributed by the sub-holding Doverie Capital.
Doverie Capital had a net income of BGN 11.5m in 2007 and is a major shareholder in 6 companies, among which Medika, a manufacturer of sanitary materials, and Doverie-Briko, a franchise between Doverie Capital and Mr Bricolage, France.
With cash at the mere BGN 0.2m, the net change in cash over the period was insignificant despite the negative CFO of -BGN 0.2m and the negative CFI of -BGN 2m. The company received BGN 10.3m in proceeds from its capital increase and, together with BGN 5.7m of new loans, succeeded to repay loans worth BGN 13m.
As reported in the statement, Sopharma’s total stake (direct and indirect) in Doverie United Holding is currently 26.7%. (FFBH)
Source: FFBH
Petrol AD [5PET]
Petrol revenues up 73.76% YoY to BGN 610.9m on settling down of Business relationships with Lukoil
Petrol non-consolidated revenues in H1 2008 amounted to BGN 610.9m compared to BGN 351.6m in H1 2007. The reason for the hike in revenues is due to the settling down of Business relationships with Lukoil. Accordingly net income hiked to BGN 162m compared to BGN 15.5m in H1 2007.
Source: Investor.bg; FFBH
Toplivo AD [3TV]
Toplivo revenues up 34% YoY to BGN 169.8m
Toplivo booked BGN 169.8m non-consolidated revenues in H1 2008, up 34.44% YoY. Operating expenses grew almost identically to revenues by 34.78% YoY to BGN 163.4m. EBITDA margin deteriorated slightly to 3.74% from 3.99% in H1 2007. Net income almost doubled from BGN 0.6m in H1 2007 to BGN 1.1m in H1 2008.
Source: Profit.bg
Etropal AD [5EO]
Etropal’s revenues and net income up 15.3% and 14.2% YoY, respectively
Etropal booked BGN 7.2m revenues in H1 2008, up by 15.3% YoY. Operating expenses however grew rapidly by 16.4%YoY to BGN 6.5m. Cash flow from operating activities deteriorated significantly to a negative BGN 1.3m from a positive BGN 0.5m in H1 2007. Net profit increased 14.2% YoY to BGN 0.5m.
Source: Investor.bg; FFBH
Albena AD [6AB]
Albena posted revenues of BGN 19.3m, up 23.65% YoY
Albena booked revenues of BGN 19.3m in H1 2008 up by 23.65% YoY. Operating expenses grew slowly than revenues by 4.91% YoY to BGN 20.3m. The company booked a net loss of BGN 11.7m compared to a loss of BGN 11.7m in H1 2007.
Source: Investor.bg; FFBH
Kremikovtzi AD [4KW]
Bulgargaz may cut gas supplies to Kremikovtzi
Bulgargaz has warned Kremikovtzi it will discontinue its supplying on August 1 unless the company pays its BGN 7.5m July gas bill, said Lyudmil Pavlov, leader of the Podkrepa trade union at the plant.
In related news, 22 operation managers and directors at the steel plant submitted a declaration to the prime minister and the ministers of economy and transport, complaining about the policy against the company pursued by Bulgargaz and BDZ. The declaration further calls out the government on its failure to take a clear stand on the plans for the company's future. Economy minister Petar Dimitrov Wednesday reiterated that he will not allow a shutdown of the plant.
Arcelor Mittal who has broken off its tolling agreement with Kremikovtzi (after failing to square positions with the government) yesterday reaffirmed its interest in the acquisition of the company.
Source: Dnevnik
Orgachim AD [5ORG]
The CEO of Orgahim filed a resignation request
The CEO of Orgahim Ivan Sokolov submitted a resignation request on the general sherholder’s meeting of the company held yesterday. The Information was confirmed by Sokolov himself.
Source: Dnevnik; FFBH
CBA Asset management AD [C81]
CBA Asset management shareholders voted negative on 3% share buy back
At a general shareholder’s meeting of CBA Asset management held on July 26 was decided the company’s net income for 2007 to be retained in the reserves fund. The shareholders of the company voted negative on the proposal for the buy back of up to 3% of the company’s capital. CBA Asset management announced that it will set up a new company, CBA Logistics. Its capital will amount to BGN 0.1m, distributed in 1 000 shares of par value of BGN 100 each. CBA Logistics will be involved in wholesale trade, warehousing and transport activities.
Source: Pari
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BMU31-07-08.pdf, 74 Kb
