market WRAP-UP
SOFIX dropped to a 5-year low on Thursday as the sell pressure continued and the sellers seemed to be getting more and more aggressive. The oldest Bulgarian index set the new bottom level at 407.24 (-7.39%) as 18 out of 20 companies closed in the red zone. The top loser turned out to be Neochim (3NB) which lost 20.35% to BGN 45.00 on growing concerns that the demand for fertilizers would rapidly shrink in the economic slow down and the increasing price of natural gas would further hurt the company. The most actively traded was Central Cooperative Bank (4CF) which lost 11.25% to BGN 1.06 with total volume of 382k shares, more than 200k of which were traded at BGN 1.00. Industrial Holding Bulgaria (4ID) and Enemona (E4A) also suffered badly as they lost 16.80% and 15.03% to BGN 2.12 and BGN 6.05 respectively. BG40 declined even more as the huge drop in Odessos Shiprepair Yard (5ODE) pushed the index down to 117.78 (-9.11%). BGTR30 got away with only 5.74% decline, fixing 314.19.
| Sofix | BG 40 | BGREIT | BGTR30 | |
| Value | 407.24 | 117.78 | 52.24 | 314.19 |
| 1-day change (%) | -7.39 | -9.11 | -0.72 | -5.74 |
| 7-day change (%) | -13.73 | -16.21 | -2.43 | -11.42 |
| 90-day change (%) | -60.76 | -54.35 | -40.34 | -53.45 |
| 365-day change (%) | -77.11 | -78.96 | -47.76 | -68.58 |
Note: BG REIT and BG TR30 started 31 August 2007
| BSE Daily Volume | 3 491 493 |
| BSE Daily Turnover | 5 858 214 |
| Average Daily Turnover YTD | 10 383 901 |
| Average Daily Turnover 12 months | 16 409 500 |
Most recent macro data
| Inflation (HICP, M/M Oct) | 0.1% |
| Inflation (HICP, cum. 2008) | 8.1% |
| LEONIA Reference Rate | 5.70% |
| SOFIBOR /3 months/ | 7.901% |
| GDP Growth (Y/Y H1 2008) | 7.1% |
| Unemployment (Sep 2008) | 5.8% |
exchange rates
| Current | Change | |
| BGN/USD | 1.56154 | 0.00062 |
| BGN/EUR | 1.95583 | Fixed |
| EUR/USD | 1.2525 | -0.0005 |
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
The yield on 10-year Bulgarian government bonds reaches 7.19%
The average yield on 10-year Bulgarian treasury bonds has reached 7.19% on Monday primary auction, BNB announced. The yield from the previous auction was 6.12%.
Source: Investor.bg; FFBH
Agriculture
Bulgaria government allocates BGN 207m to farmers
Bulgaria's cabinet decided on Thursday to allocate BGN 60m of subsidies to the milk producers, and BGN 147m of additional national payments for 2008 to all agricultural producers.
Bulgaria's Deputy Prime Minister Meglena Plugchieva explained the money for the agricultural producers was allocated in accordance with the government's consultations and agreements with the European Commission.
The decision for the allocation of the additional subsidies comes after the Bulgarian farmers protested intermittently during the recent months demanding greater support from the government. The payment of the additional farmers' money for 2008 will start in December 2008, according to Plugchieva.
Source: Novinite.com
Real estate
The crisis decreases new office spaces by 60%
As a result of the global financial crisis, about 60% of the construction of office projects in Sofia have been either postponed or frozen, Krassimir Dimitrov from Source Real Estate Advisers said. Data showed that the new office spaces to be constructed in the next 5 years would be 1.2m sq. m, which is two times less than expected. The rents are also expected to fall and 70% of the turnover should be carried out at EUR 12-14/sq. m.
Source: Pari
CORPORATE news
Albena AD [6AB]
Financial crisis may lead to hotel closures in Albena
The management of Bulgaria's Black Sea resort of Albena is considering several scenarios for reducing the number of hotel beds in summer 2009 because of the expected negative effects of the global financial crisis on the tourism sector. The news was announced by Albena's CEO Krasimir Stanev as quoted by Darik Dobrich.
The worst-case scenario should be the closing down of 50% of Albena’s hotels in summer 2009. However, company still hoped that the number of hotel beds that would have to curtail would be less, Stanev said. He explained also that the charging of less than BGN 40 per day for an allinclusive package would mean the hotels would be incurring losses. By April 2009, the management of Albena should know how many hotels would have to close down, and what the prices of the tourist packages would be.
Albena's net profit in 2008 is estimated to be about BGN 13m. This is 20% less than its 2007 profit, which was BGN 17m. Stanev also stated that because of the expected stagnation in the tourism sector, the company was not planning to make any serious investments in the resort in 2009.
Source: Novinite.com
Neohim AD [3NB]
Neochim and Agropolichim to decrease output on weak demand
Neochim announced it should restart its capacity later than expected because of slow trade on international markets and stagnation of the domestic market.
In related news it was announced that Agropolichim is expected to close two production lines by the end of the week. The CEO of Agropolychim Devnya, Philippe Rombaut stated that the announced shutting down of the plant's manufacturing operations had been caused by the total collapse of Bulgaria's domestic market for fertilizers. The company usually transported 2,000 tons per day during the busy autumn season but now they delivered only 300 tons. The company expected to restart production of phosphates fertilizers in December when it has orders from the Middle East. As per nitrate production it would stay closed for indefinite period. Over the next 2-3 weeks the company would decide how many workers it should lay off. Currently the staff was 1,100.
Another critical problem according to Rombaut was the fact the reduced natural gas prices recently announced by Gazprom would be introduced in Bulgaria with a nine-month delay because of Bulgargaz's present contracts with the Russian supplier. This was bound to hurt the competitiveness of Bulgaria's fertilizer industry.
Source: Investor.bg; Novinite.com; FFBH
Chugunoleene AD [59C]
Chugunoleene should fire about 25% of its staff
Bulgaria's foundry Chugunoleene announced on Thursday it was going to dismiss about 25% of its workers because of the effects that the global financial crisis had on its orders from abroad. The sacking of workers is one of the measures that the company is undertaking in order to cut its expenses. The exact number of workers to be sacked has not been announced.
The company states that its major clients from Italy, Germany, and France had already reduced the volume of their orders for the last months of 2008 and for 2009. 85% of Chugunoleene’s production is destined for exports, and the global credit crunch is affecting significantly the volume of its sales. Chugunoleene's main clients and partners include Clark - Germany; Cesab - Italy; Goss Graphic Systems - UK/France; DanTruck - Denmark; Terex - Ireland; as well as machine-building plants in Slovenia, Turkey, Greece, and the USA.
Source: Novinite.com
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