Bulgarian Stocks Extend Losses in Higher Turnover

The market would most probably calm down by the end of the week, Ivan Ivanov, investment consultant with Bulgarian asset management company Status Capital, told SeeNews.

"It is hard to predict if there will be a rally this week, but the hefty drops posted today and yesterday are so rare you could bet they won't happen again anytime soon," Ivanov said.

On Tuesday, the SOFIX index, which includes the 20 most liquid stocks on the Bulgarian Stock Exchange (BSE), dropped 4.92% to 654.42 points, and the broader BG 40 index, which tracks the 40 most liquid companies on the bourse, lost 3.63% to 165.26. On Monday, the SOFIX plunged 8.43% and the BG 40 index plummeted 7.74%.

The inertia from yesterday influenced the market as the negative trend retained its psychological hold, Ivanov said.

"The fear is still too strong. [...] The sell-offs are like a flight, some of the investors are exiting positions, taking into consideration neither the fundamentals nor the outlook," Ivanov said, adding that the timing is right for investors willing to buy into the market.

BSE's turnover, excluding block and other pre-agreed deals, increased to 7.9 million levs ($5.5 million/4.0 million euro) from 6.0 million levs on Monday.

"The turnover was a bit higher. If the market was falling sharply in the absence of such a turnover, the situation would have been more alarming," Ivanov said.

Most banking stocks carried over their downward momentum from the previous day. Three of the four banks listed on the BSE slid further into negative territory on Tuesday. The only standout was First Investment Bank which added 2.96% to 3.3 levs in a volume of around 549,000 shares.

"After such a steep decline yesterday, it was normal [for FIBank] to end higher [today]," said Ivanov. Shares of the bank plunged 22.92% on Monday.

According to Ivanov, the drop in the share price of Bulgarian-American Credit Bank , which is more dependent on external financing, was normal as "it looks like it would be affected by the [global financial] crisis."

BACB lost 11.5% on Tuesday to close at 29 levs as 423 shares of the bank traded.

The other two listed banks and the other most liquid stocks such as holding companies like Chimimport followed the downward trend, said Ivanov.

Shares of Chimimport plunged 9.53% to close at 4.13 levs as 92,180 stocks were traded.

Central Cooperative Bank ended 9.61% lower at 2.35 levs as 109,462 stocks changed hands. 

Corporate Commercial Bank plummeted 7.48% to 74 levs in a volume of 10,295 shares.

"The Synergon gains were surprising," Ivanov said, adding that there was no apparent reason for the 5.16% increase posted by the stock on Tuesday. Synergon closed at 3.85 levs in a volume of 15,782 stocks. 

On Tuesday, the shares of 79 companies ended lower, 28 gained ground and 14 closed flat.

The BG TotalReturn30 (BG TR30) index, in which companies with a free float of at least 10% have equal weight, fell 4.08% to 436.94 points and the BG-REIT index, tracking the performance of real estate investment trusts, ended 3.04% lower at 68.78.

The Dnevnik 20 index, calculated by local business daily Dnevnik from the share prices of the 20 leading companies in terms of liquidity and market capitalisation, plunged 4.93% to 83.36 points.

(1 euro = 1.95583 Bulgarian levs)