market WRAP-UP
On Friday the negative trend continued as the trading session started in total panic as local retail investors predominantly were selling at all cost pushing the prices heavily down. All indices moved down with the top loser being BGTR30 which lost 5.25% to 494.82 bps. SOFIX reached 751.67 bps. (-3.81%), BG40 also closed negative at 185.87 bps (-3.61 %). Among the top losers of the session were Toplivo (3TV, BGN 11.70, -12.71%), Industrial Capital Holding (4I8, BGN 4.12, -17.85%), Polimeri (51P, BGN 6.65, -6.29%) and Euroins Insurance (5IC, BGN 4.25, -10.53%). The day gainer was Central Cooperative Bank (4CF, BGN 2.90, +7.33%). The major moves came from First Investment Bank (5F4, BGN 4.15, -9.74%) where more than 113k shares change hands.
| Sofix | BG 40 | BGREIT | BGTR30 | |
| Value | 751.67 | 185.87 | 76.46 | 494.82 |
| 1-day change (%) | -3.81 | -3.61 | -0.66 | -5.25 |
| 7-day change (%) | -8.37 | -8.95 | -5.70 | -8.98 |
| 90-day change (%) | -32.57 | -37.42 | -19.22 | -34.49 |
| 365-day change (%) | -61.45 | -69.30 | -23.54 | -50.52 |
Note: BG REIT and BG TR30 started 31 August 2007
| BSE Daily Volume (shares) | 1 402 215 |
| BSE Daily Volume (BGN) | 4 735 270 |
| Avg Daily Turnover YTD (BGN) | 11 133 119 |
| Avg Daily Turnover 12 mo. (BGN) | 18 696 569 |
Most recent macro data
| Inflation (HICP, M/M August) | -0.1% |
| Inflation (HICP, cum. 2008) | 7.1% |
| LEONIA Reference Rate | 5.68% |
| SOFIBOR /3 months/ | 7.486 |
| GDP Growth (Y/Y Q2 2008 preliminary) | 7.1% |
| Unemployment (August 2008) | 5.89% |
exchange rates
| Current | Change | |
| BGN/USD | 1.41378 | 0.00701 |
| BGN/EUR | 1.95583 | Fixed |
| EUR/USD | 1.3834 | -0.00689 |
Sofix/ BG 40 / BGREIT / BGTR30 (charts)
DAILY TRADING (selected stocks)
All figures in BGN (BGN/EUR rate fixed at 1.95583)
Compensatory Instruments (table)
ECONOMY AND POLITICS
Insurance
Insurers expected to increase price of motor third-party liability
The price of the mandatory motor third-party liability insurance should go up by the end of the year, and some companies are speaking about further hikes in mid-2009, a research showed. Insurers said a price increase is necessary to catch up with levels in the EU and avoid financial problems. Bulgarian insurers sell the cheapest third-party liability policy but its coverage spans the whole of the EU, said Rumen Yanchev, executive director of Bulstrad. The higher coverage limits laid down in the Insurance Code should further press prices up, he said.
Euroins said they might raise the price by 20% in December-January, the market’s busiest period. Dancho Danchev, executive director of Victoria and deputy board chairman of the insurers’ association announced that they should raise the price to BGN 180-190 by January and to BGN 300 by the middle of next year. Bul Ins will keep prices intact by the end of the year having raised them by 30-35% on average from October 1.
Source: Dnevnik
Energy sector
Employers and trade unions to challenge new gas price
The Confederation of Employers and Industrialists in Bulgaria (CEIBG) is likely to contest the regulator decision about the gas price increase, chairman Ivo Prokopiev told Darik Radio. The Bulgarian Chamber of Commerce and industry (BCCI) and trade union CITUB requested on Monday that the new price be halted until the court has come up with a decision.
Under local energy legislation, the new prices will be in place until the judges have had their say on the issue. If they rule in favour of employers and unions, the prices will be cut as of the date the final decision takes effect.
The price of gas was raised by 23.9% from October 1 against the 28.9% proposed by the regulator and the 36.5% requested by state-controlled gas distributor Bulgargaz. The price will crawl by a further 21.4%, or a total of 50%, over the next three months.
Source: Dnevnik
Energy sector
RWE is selected for strategic investor for Belene NPP
Bulgaria’s national power grid operator NEK selected German company RWE to be strategic investor for the construction of Belene nuclear power plant and should acquire 49% in the project company. Belgian Electrabel ranked second in the competition but may be invited by the winner to buy some of the shares. NEK should keep its 51% stake and RWE stick to its current offer. The German company is to inform NEK of its decision about inclusion of Electrabel. The agreement should be signed by the end of the month.
According to calculations RWE is expected to pay BGN 2.1bn at least for its participation. BGN 1.2bn of which should be paid-in capital in the new project company.
Source: Dnevnik
CORPORATE news
Kremikovtzi AD [4KW]
Pravin Banker offers that Kremikovtzi be nationalised
Investment banker Pravin Banker called to Bulgaria’s Prime Minister Sergei Stanishev in an open letter forwarded to Dnevnik daily to nationalise steel mill Kremikovzti. The financier, who has some experience in rescuing metallurgical companies and has kept an eye on Kremikovtzi since 1998, put forward an action plan to help Bulgaria get away with EU punishment.
The plan includes that the state as the mill’s biggest creditor, should propose a restructuring plan to recover the company and sign a three-year management contract with a strategic investor which should be given a call option. Only companies with annual steel output of 15m tones should qualify for the competition.
Next step in the rescue plan should be creating a supervisory committee to manage the process. The mill may also be delisted from the Bulgarian Stock exchange provided that minority shareholders are compensated.
All proven debts should be rescheduled into a new seven-year bond with a 7% coupon.
The planalso stipulates that the state should become the company’s sole shareholder and take a EUR 350m loan to finance the mill’s eco and investment programmes. The indicative price for the operating manager and the call option should be set at EUR 150m and immediately injected into the company.
Source: Dnevnik
FundsBulgarian mutual fund assets decrease 20% QoQ in Q3 2008
The net assets of Bulgaria’s mutual funds have slid 20% QoQ to just above BGN 690m over June to September 2008, data showed. The fund assets are 40% YtD down from December 2007, when the funds managed more than BGN 1.15bn.
Pioneer investments topped the Bulgarian mutual funds market in the nine months to September with assets of BGN 146m. The runner-up was Elana Fund management followed by DSK Asset management.
Source: Dnevnik
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BMU06-10-08.pdf, 75 Kb
