market WRAP-UP
SOFIX lost 1.90% to 959.17 during the week as the negative news worldwide did not bypass the Bulgarian Stock exchange. The liquidity remained extremely low and even small volumes were enough for the large majority of the issues to register significant losses. The only exception of the overall picture seemed to be First Investment Bank [5F4] which attracted investor’s attention, generating more than 613k total volume for the week. The main reason for the large demand appeared to be the rumours about the sale of the bank which created some enthusiasm among the local investors. At the end the bank closed at BGN 6.099, gaining 2.68% for the week. BG40 and BGTR30 also declined, fixing 234.24 and 628.78 respectively. The total return index set a new all-time-low after the disappointing performance from Chimimport (6C4, BGN 7.153, -7.10%) and Synergon Holding (6S7, BGN 5.50, -6.49%). Good volume was also traded in the mineral water producer Devin (6D3) where a total of 185k changed hands pushing the price down to BGN 3.15 (-4.55%).
news HIGHLIGHTS
- GDP real growth in H1 2008 was 7.1% YoY. TheGDP reached BGN 29.4bn, preliminary data showed.
- HICP inflation slightly decreased with -0.1% MoM to 11.2% YoY in Aug 2008. The CPI grew 0.1% MoM to 13.8% YoY.
- Bulgargaz, the largest local gas retailer, presses for a 36.5% increase in the price of natural gas from Q4 2008.
- Voestalpine, an Austrian steelmaker, signed a memorandum with the Ministry of Economy. Bulgaria is competing with Romania, Turkey, and Ukraine to attract a €5bn investment.
- Bulgaria and Poland were equally attractive for foreign investors, according to the index of Business Trust by Reuters.
- Greek companies invested over EUR 2bn in Bulgaria in H1 2008, the Athens newspaper Imerisia announced.
- FDI in real estate decreased 10% YoY, the Minister of Economy claimed.
- Bulgarian REITs total assets reached BGN 1.5bn as of June30th, up 67.3% YoY. The statistical data includes 68 REITs.
- FairPlay Properties REIT [6F3] obtained a EUR 4.2m loan.
- A Holding Roads [6H2] subsidiary signed a BGN 12m contract for the construction of residential property.
- Bulgarian mutual funds’ investments in shares were BGN 333m as of June 30th, data of the FSC showed.
- Devin [6D3], a mineral water producer, steps up its presence in Romania, plans new plant and warehouses.
- Eurohold Insurance Group [4EH] will raise to 91.4% its stake in the Macedonian insurer Euroins Osigurovanje Macedonia.
- Bulgaria ranked 45th among 181 economies in the Doing business report by the World Bank and IMF, measuring business regulations and the relative ease of doing business.
- A total of 64 mergers and acquisitions deals worth $2.6bn were closed in H1 2008 in Bulgaria, a survey showed.
- The capital raise prospectus of Lomsko Pivo [6L1] was approved.
SOFIX/ BG40 (chart)
BGTR30/ BG REIT (chart)
| Change | SOFIX | BG40 | BGTR30 | BGREIT |
| 1-wk | -1.9% | -1.2% | -1.5% | -1.6% |
| 3-mo | -19.7% - | -28.1% | -21.9% | -10.3% |
| YtD | -44.8% - | -54.6% | -42.1% | -19.7% |
| 12-mo | -41.4% - | -44.6% | -38.5% | -14.9% |
Top Gainers*
| Kapitan Diado Nikola [3KN] | 9.9% |
| Sopharma [3JR] | 7.0% |
| Biovet [53B] | 6.4% |
| Holding Roads [6H2] | -12.9% |
| Billboard [5BP] | -8.7% |
| Synergon Holding [6S7] | -7.2% |
* from our list of selected stocks (see last page)
| Turnover statistics | Week 37 |
| Weekly volume (shares) | 5 780 625 |
| Avg. weekly volume YtD | 12 213 675 |
| Weekly turnover (BGN) | 22 867 283 |
| Avg. weekly turnover YTD (BGN) | 55 046 956 |
Most recent macro data
| BGN/EUR exchange rate | 1.95583 |
| Inflation (HICP, YoY Aug) | 11.8% |
| Inflation (HICP, cumulative 2008) | 7.1% |
| GDP Growth (YoY H1 2008) | 7.1% |
| Unemployment (July 2008) | 5.9% |
| Public External Debt/GDP (July '08) | 11.9% |
| FDI Jan-June '08 (EUR) | 2.1bn |
| C/A Deficit/GDP (Jan-June '08) | -11.5% |
Source: BNB; NSI; National Employment Agency
| Type | Coupon | Maturity | Currency | Yield (%) |
| Treasuries | 3.75% | 16-Feb-10 | BGN | n.a. |
| Treasuries | 4.75% | 11-Feb-11 | BGN | n.a. |
| Treasuries | 5.20% | 04-Feb-14 | BGN | n.a. |
| Eurobonds | 8.25% | 15-Jan-15 | USD | n.a. |
| Sofibor | Overnight (ON) | BGN | 5.37 | |
| Sofibor | 3-month | BGN | 7.27 | |
| Sofibor | 12-month | BGN | 8.66 | |
| Base Interest Rate | BGN | 5.23 |
Source: BNB; UBB
news in the spotlight
Insurance sector
Insurance market sustains growth in H1 2008 at the expense of profitability
General insurance gross written premiums amounted to BGN 723m in H1 2008, 21% up YoY. Gross claims were BGN 356m, up 41% YoY. The technical result of all general insurers was negative, at BGN 13.8m, against a positive result of BGN 28.6m in H1 2007. At the end of the first half of the year the assets of the general insurers totalled BGN 1.5bn, an increase of 22.5% YoY. Motor insurances accounted for 69% of total premiums, whereas gross claims from motor insurances comprised 85% of total claims. The greatest rise in percentage terms was achieved by railway insurance (+83%), vessels (+35%) and credits (+33%).
Life insurance gross written premiums grew faster than those of general insurance, at 27% YoY, to BGN 129m. Claims and compensations paid stood at BGN 36m, up 35% YoY. The technical result of all life insurers was negative BGN 5m compared to a positive result of BGN 7m in H1 2007.
The health insurance market gross written premiums stood at BGN 15.1m in H1 2008, up 5.2% YoY. Claims paid amounted to BGN 9.6m compared to BGN 7m in H1 2007, up 38% YoY.
Source: FSC; FFBH
Bulgarian Stock exchange
BSE Replaces 9 Companies in the BG40 index
As of 23 September (Tuesday), the content of the BG40 index measuring the 40 most liquid companies on the BSE will be changed as follows:
| Companies removed from BG40: | New companies in BG40: |
| Albena [6AB] | Billboard [5BP] |
| Bulgarian River Shipping [5BR] | Enemona [E4A] |
| Chugunoleene [59C] | Favorit Hold [6A9] |
| Devin [6D3] | Holding Roads [6H2] |
| Holding Varna [5V2] | Neochim [3NB] |
| Lomsko Pivo [6L1] | Oil & Gas Exploration Production [4O1] |
| M+S Hydraulic [5MH] | Polimeri [51P] |
| Severcoop Gamza Holding [6S4] | Trace Group Hold [T57] |
| Zaharni Zavodi [3Z9] | Zarneni Hrani Bulgaria [T43] |
On the same date, Enemona [E4A] will be added to the calculation of SOFIX, the index of the largest market capitalisations.
SELECTED STOCKS INDICATORS (table)
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Copyright: 2006 First Financial Brokerage House. All rights reserved.For further Information please contact FFBH, 2 Enos Str., 1408 Sofia, BulgariaPhone: +359 2 810 64 21, fax: +359 2 810 64 01, e-mail: ffbh@ffbh.bg, web site: http://www.ffbh.bg
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BWU Weekly 08-12.09.2008.pdf, 77 Kb
