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market Trend
BSE was under the pressure of foreign markets and closed in the red. Most companies declined as investors’ panic obsessed the stock exchange and participants tried to reduce their positions. The negative bias predominated during the week. SOFIX remained below 1300 points after decisive break of the consecutive support level. The average P/E decreased to 17 and the main reason for the negative week is the “fire sale” from over-leveraged investors. We cannot exclude further weakness in thin volumes and this is the path of least resistance. However, a strong session on the upside will mark at least a short-term bottom. Monbat (MONBAT) also was under pressure despite the announced investment program. On March, 21 after the market close, the battery producer announced that will lead a GMS with main item - profit allocation decision. Banking sector remained under pressure. The financials fell under the international news, despite that comparing to more mature markets and especially to Euro-zone banks is inappropriate due to the rising personal income and the lower debt burden of companies and individuals in Bulgaria.
BG40 (LS)/ SOFIX (RS) (chart)
Trading Activity
The volumes slightly improved during the week. SOFIX’s turnover remained too thin - around BGN 4 m as some of the shares were among the most traded positions. Buyers were cautious and stayed aside from the market as they expected lower prices and further weakness. The low liquidity could continue to restrain the market in short term.
Traded Volumes in BGN (chart)
SOFIX
| Stock | Last Price | Weekly Change | Bid | Ask |
| Albena | 87.37 | -5.05% | 85.06 | 89.90 |
| Bulgarian-American credit Bank | 67.16 | -6.98% | 67.05 | 71.34 |
| Central Cooperative Bank | 5.45 | -17.42% | 5.37 | 5.39 |
| Chimimport | 8.38 | -18.08% | 8.30 | 8.49 |
| Corporate Commercial Bank | 81.92 | -9.06% | 81.10 | 82.20 |
| Elana Opportunity Land Fund | 2.3 | 0.00% | 2.28 | 2.30 |
| Euro Ins | 9.54 | -5.17% | 9.20 | 9.67 |
| First Investment Bank | 7.52 | -18.61% | 7.37 | 7.50 |
| Holding Roads | 1043.52 | -10.52% | 1009.00 | 1010.00 |
| Industrial Holding Bulgaria | 7.22 | -6.84% | 7.29 | 7.30 |
| Kaolin | 12.83 | -8.49% | 12.70 | 12.80 |
| Lead and Zink Complex | 57.58 | -14.77% | 55.05 | 56.00 |
| M+S Hydraulic | 9.4 | -6.00% | 9.29 | 9.79 |
| Monbat | 25 | -9.09% | 24.47 | 24.50 |
| Neochim | 50.81 | -7.92% | 50.56 | 53.00 |
| Orgachim | 400.93 | -10.10% | 390.00 | 400.00 |
| Sopharma | 6.1 | -12.73% | 6.10 | 6.28 |
| Sparky Eltos | 11.34 | 0.35% | 11.00 | 11.95 |
| Toplivo | 19.2 | -9.31% | 19.26 | 19.88 |
Most SOFIX’s components slumped on weekly basis after series of weak sessions. The volatile international situation along with investors’ panic pushed down all companies. Liquid positions, like Chimimport (CHIM) and newly included First Investment Bank (FIB), were most damaged. Sparky Eltos (ELTOS) was the only gainer after broad-based interest.
- 17 March 2008: Sopharma Logistic (FTXCO) increased its share in Maritsatex (MRTEX) to 5.01% - 0.31% direct shareholding and 4.71% via related entities.
- 17 March 2008: The Board of Directors of Lessoplast (LESPL) has appointed a GMS on June, 27. Voting right will have all shareholders registered with the Central Depository June, 13.
- 18 March 2008: Doverie United Holding (DOVUHL) increased its share in Hydroizomat (HYDRO) to 56.04% - 7% direct shareholding and 49.04% via related persons.
- 18 March 2008: 9 persons – physical and juridical, have accepted thetender offer of CB Economic & Investment Bank (BRIB) for total of 22 859 shares.
- 19 March 2008: Commission for Protection of Competition allowed Sopharma (SFARM) to acquire pharmaceutical company "Ivanchich i sinove”, Belgrade.
- 20 March 2008: BSE Board of Directors decided to put under supervision the shares of Petrol (PET) for three months due to failure of PET to cover the requirement for at least 10 % free-float. If after the expiry of the period PET don’t cover the requirements it will be transferred to the Unofficial market of Securities.
- 21 March 2008: MONBAT has appointed a General Meeting of Shareholders on May, 16 2008. The main items in the agenda is profit allocation decision – the company plans part of the company’s 2007 profit on amount of BGN 3.5 m to be distributed as dividends to the shareholders and the rest of the profit on amount of BGN 13.9 m to be used for an increase in capital. The voting right will have all shareholders registered in the Central Depository by April, 30 2008.
- 21 March 2008: Petrol Holding confirmed that will place shares of Petrol (PET) from its portfolio, which will meet the demand of the market and will increase the free-float to 10% of the issue to comply with the requirements of the BSE Rules and Regulations, as soon as the market conditions return to normal and the investors recover their interest.
Upcoming Events
- 25 March 2008: Shares of Astera Cosmetics (AST) will be listed for trading.
- 25 March 2008: Thelast date for trading with the rights for recent capital increase of Alfa Wood Bulgaria (TICHA). Currently, shares are trading below the subscription price of new shares.
- 27 March 2008: Begin the trading with the rights for the capital increase of Agricultural Land Opportunity Fund Mel Invest (ALOFMI). The capital of the company should be increased from BGN 14.044 m to BGN 28.089 m. One right gives opportunity for subscribing one new share with issuing value of BGN 1.10 per share
Macroeconomy
- The unemploymentreached 7.26% for February, 2008, which is 2.12 points down y-o-y and 0.12 points down as compared to the previous month. The unemployment declined in 25 regions since January. Regions of Sofia, Blagoevgrad and Bourgas outperformed.
- The Government Debt decreased in February by EUR 36 m in nominal value as compared to the previous month, to EUR 5.09 billions. The improvement is mainly due to the done payments through the month. The debt to GDP ratio decreased by 0.2 points to 16.1% as compared to January. At the end of the period internal liabilities are 31.8% from the total debt, whereas outside liabilities are 68.2%.
Bonds
3M SOFIBOR (chart)
Rates in the interbank market remained elevated last week as most commercial banks are maintaining an aggressive credit policy. Secondary bond trading also remained at the current yields and the largest volumes were due to repo-operations. The final date for transacting bonds of the mortgage issue of Investbank with the right on interest payment and principal repayment is March 24.
WEEKLY HIGHLIGHTS
ALCOMET /ALUM/ (chart)
CENTRAL COOPERATIVE BANK /CCB/ (chart)
LEAD AND ZINK COMPLEX /OTZK/ (chart)
ODESSOS /ODES/ (chart)
PETROL /PET/ (chart)
FINANCIAL SECTOR (table)
INDUSTRIAL SECTOR (table)
BASIC MATERIALS SECTOR (table)
CYCLICAL CONSUMER SECTOR (table)
ENERGY SECTOR (table)
OTHER (table)
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Weekly BSE 21 03 2008.pdf, 81 Kb
