market WRAP-UP
The block trades formed 61% of Monday’s trading turnover on BSE. All of the traded volume in BG Agro (AO0, 373 161 volume, BGN 1.68, 0.12%) was transferred at once, two trades in Balkan and Sea Properties REIT (5H4, 28 986, BGN 10.35, 0.00%) took place and 25 000 shares in Emka (57E, 31 619, BGN 3.25, 1.56%) changed hands at BGN 3.05. The total turnover increased to BGN 1.67m. All indices finished in the red zone with slight moves down. BG40 (117.63, -0.42,-0.36%) and BGTR30 (327.87 -0.38,-0.12%) were led by Petrol (5PET, 908, BGN 4.18, -5.00%). The loser for SOFIX (424.53, -1.31,- 0.31%) was Bulgarian American credit Bank (5BN, 213, BGN 15.80, -2.47%). BGREIT (44.05, -0.04,-0.09%) lost less from its value with two traded names, both colored in red - Prime Property BG REIT (4PY, 4 000, BGN 0.531, -10.00%) and FairPlay Properties REIT (6F3, 2 000, BGN 0.397, -0.75%).
| Sofix | BG 40 | BGREIT | BGTR30 | |
| Value | 424.53 | 117.63 | 44.05 | 327.87 |
| 1-day change (%) | -0.31 | -0.36 | -0.09 | -0.12 |
| 7-day change (%) | -0.18 | -0.09 | -0.70 | 0.02 |
| 90-day change (%) | -4.02 | -1.58 | -8.53 | -2.65 |
| 365-day change (%) | 54.30 | 32.29 | 10.54 | 64.26 |
| BSE Daily Volume (shares) | 2 246 992 |
| BSE Daily Volume (BGN) | 1 671 012 |
| Avg Daily Turnover YTD (BGN) | 1 856 421 |
| Avg Daily Turnover 12 mo. (BGN) | 3 352 789 |
Most recent macro data
| Inflation (HICP, M/M Jan) | 0.6% |
| Inflation (HICP, cum. 2010) | 0.6% |
| LEONIA Reference Rate | 0.16% |
| SOFIBOR /3 months/ | 4.214% |
| GDP Growth (Y/Y 2009) | -5.1% |
| Unemployment (Jan 2009) | 9.9% |
exchange rates
| Current | Change | |
| BGN/USD | 1.44002 | 0.00906 |
| BGN/EUR | 1.95583 | Fixed |
| EUR/USD | 1.3582 | -0.0086 |
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
Macroeconomic news and statistics
Government debt rises 1.5% MoM to 4.9bn in January
Public debt* as of the end of January rose by 1.5% MoM to €5.5bn, data from the Finance Ministry showed. Domestic debt amounted to €1.56bn, up 1.3% MoM and external debt was 1.6% higher MoM at €3.34bn. The state-guaranteed debt was EUR 625m.
*public debt includes domestic, external and government-guaranteed debt.
Source: Finance Ministry; FFBH
Macroeconomic news and statistics
Bulgaria seeks to cancel contract with Fitch Ratings
Bulgaria has sought to cancel its contract with international credit ratings agency Fitch in an attempt to cut public spending, the country's Finance Ministry announced. The Finance Ministry informed Fitch Ratings Ltd. on February 1 of its intention to apply the clause of the contract allowing each of the two sides to seek the cancellation of the deal, which was initially signed in October 2004.
According to the Finance Ministry, it is inexpedient for the country, which is not a regular issuer of debt on international capital markets, to maintain contracts for awarding sovereign ratings with several ratings agencies. Bulgaria also has ratings contracts with Standard and Poor's, Moody's and JCRA.
Source: SeeNews
Macroeconomic news and statistics
Moody's assigns negative outlook to Bulgarian banking system
Moody's Investors Service assigned negative credit outlook for the Bulgarian banking sector because of the adverse impact of the domestic economic recession on the credit quality and net profits of the country's banks.
Moody's negative outlook for the Bulgarian banking system expresses the rating agency's view on the likely future direction of fundamental credit conditions in the industry over the next 12 to 18 months. It does not represent a projection of rating upgrades versus downgrades.
In its new Banking System Outlook on Bulgaria Moody's said it recognises that the banking system remains adequately profitable and has strong capital buffers but nevertheless it pointed out that the system's non-performing loans grew at a very rapid pace during 2009, resulting in high provisioning expenses and reduced net profitability for most banks. It also noted that while the foreign parent banks are expected to maintain their presence in the Bulgarian market, any incremental funding support they provide is likely to be limited in 2010, given the difficulties faced in their home markets. In cases where support is extended, Moody's believes the costs of provided funds will remain high in view of the higher risks embedded in the Bulgarian market.
As regards profitability, on the one hand, Moody’s expects revenue generation to be constrained by low growth in Business volumes, despite good interest rate margins, while net profitability is expected to continue to be affected by elevated provisioning expenses. On the other hand, Moody’s expects managements' efforts to rationalise the banks' operations and rein in costs to partly alleviate the pressure on profits.
A key rating constraint at present, according to Moody’s, is the significant growth in credit risk assumed by the Bulgarian banks during 2009. Moody's also views the borrower risk concentration in some banks' loan portfolios as giving rise to particular concerns with regard to increased credit losses in case of some corporate defaults. Going forward, the rating agency also cautions that the modest recovery in the economy in 2010 and expectations of a continued rise in unemployment levels suggest that delinquencies will continue to grow, albeit at a slower pace.
Source: Investor.bg; FFBH
Pharmaceutical sector
Actavis to sell Bulgarian drug distributor Higia
Actavis Group will sell its Sofia-based drug distributor Higia to a private Bulgarian investor as its future plans focus on the company's core activity and do not include distribution, Actavis Bulgaria announced.
The new owner of Higia is Rositsa Veselinova Velikova, Actavis Bulgaria said. The size of the deal remains undisclosed.
Actavis bought Higia for an undisclosed sum in 2005. According to local media reports the price of the deal was around BGN 33m. Higia had a 19.3% market share in Bulgaria through September, ranking third after blue-chip drug maker Sopharma and Libra, the wholly-owned subsidiary of Germany's largest drug wholesaler Phoenix Pharmahandel.
Source: SeeNews
Real estate
Dutch-based CCI agrees to sell Bulgarian real estate assets to Israel Theatres for €85m
Dutch-based Cinema City International (CCI), an operator of multiplex theatres in Central and Eastern Europe, said it has agreed in principle with its controlling shareholder Israel Theatres to sell it all of its real estate development and related activities in Bulgaria for approximately €85m.
The Business to be sold to Israel Theatres includes the Mall of Ruse project in the city of Ruse, on the Danube, which is in an advanced construction stage and is expected to open later this year; the Mall of Stara Zagora, in Southern Bulgaria, which is still in its planning stage; and RESB, the management company, which is responsible for building and leasing these assets.
CCI said the main aim of the transaction is to allow the company to focus on developing its theatre exhibition and film distribution businesses while reducing its outstanding debt. The execution of the definitive binding agreements and the closing of the transaction are expected to take place later this month.
Source: SeeNews
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