market WRAP-UP
The negative trend continued on Thursday. The indices made another step back as the sellers prevailed again. SOFIX declined 1.07% to 598.51 bps pushed down mainly by Elana Agricultural Land Opportunity Fund (4EC, BGN 1.08, -6.49%), Chimimport (6C4, BGN 3.69, -4.28%) and Orgahim (5ORG, BGN 105.2, -4.28%). The price weighted BG40 lost (-1.33%), closing at 159.13 after the sharp drop in Advance Terrafund REIT (6A6, BGN 1.20, -18.81%) and Polimeri (51P, BGN 2.159, - 11.88%). BGTR30 also declined, fixing 410.80 (-2.52%) with the major moves coming from Moststroy (5MY, BGN 18.9, +6.77%) and Toplivo (3TV, BGN 9.60, -4.10%). The most liquid company for second consecutive day was First Investment Bank (5F4, BGN 3.839, -4.03%) where more than 129k shares changed hands.
| Sofix | BG 40 | BGREIT | BGTR30 | |
| Value | 598.51 | 159.13 | 57.19 | 410.8 |
| 1-day change (%) | -1.07 | -1.33 | -6.89 | -2.52 |
| 7-day change (%) | -1.52 | -1.60 | -11.47 | -2.02 |
| 90-day change (%) | -41.79 | -41.18 | -36.10 | -40.15 |
| 365-day change (%) | -68.3 | -72.81 | -42.81 | -58.92 |
Note: BG REIT and BG TR30 started 31 August 2007
| BSE Daily Volume (shares) | 850 295 |
| BSE Daily Volume (BGN) | 2 839 896 |
| Avg Daily Turnover YTD (BGN) | 10 854 284 |
| Avg Daily Turnover 12 mo. (BGN) | 17 777 691 |
Most recent macro data
| Inflation (HICP, M/M September) | 0.9% |
| Inflation (HICP, cum. 2008) | 8.0% |
| LEONIA Reference Rate | 5.40% |
| SOFIBOR /3 months/ | 7.813% |
| GDP Growth (Y/Y H1 2008) | 7.1% |
| Unemployment (September 2008) | 5.8% |
exchange rates
| Current | Change | |
| BGN/USD | 1.5268 | 0.00392 |
| BGN/EUR | 1.95583 | Fixed |
| EUR/USD | 1.281 | -0.0033 |
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
Financial sector
Corporate lending slows down
Corporate lending in Bulgaria continued to dwindle in September coming in at BGN 494m against BGN 1.3 billion in June, BGN 858m in July and BGN 689m in August, showed data of the Central Bank. Pressed by closer bank scrutiny, new consumer and housing mortgage loans were BGN 444m, bouncing back to June and July levels from the weaker BGN 278m in August.
Bankers commented the tighter loan requirements will sift away riskier projects. In the face of the current investors are too revising their plans.
Loans to firms, household andfinancial corporations topped BGN 47.8bn in end-September, or 72% of GDP. The annual growth pace slowed to 47.8% from 49.5% in August. Corporate lending alone calmed down to 50.2% from 53.6% in the previous month and is BGN 29.7bn. Household loans grew 43.8% p.a. compared to 42.5% in August and reached BGN 17.6bn.
Source: Dnevnik
Financial sector
MPs discuss EUR 50k deposit protection
Bulgarian MPs have considered three bills of lifting the floor of guaranteed deposits to the localcurrency equivalent of EUR 50k from BGN 40k at present, BTA state news agency reported. Representatives of the ruling coalition proposed raising deposit protection to BGN 100k. Also on the table is guaranteeing debt instruments issued by Bulgarian banks and allowing the deposit insurance fund to borrow from the state budget if short of cash. The ruling parties’ proposal for state guarantees on interbank loans for a one-year period was met with a frown by the opposition.
Source: Dnevnik
Real estate
Bulgaria’s property prices gain avg 3% YoY in Q3’08
The pricesof Bulgarian properties have increased by 3% on average to BGN 1 418 in third-quarter 2008 compared to the same period of 2007, showed data of the National Statistical Institute. Flats sell for more than BGN 1 000 per sq. m. in half of the country’s 28 regional cities.
Brokers say the market is settling and switching to stand-by mode as some sellers have withdrawn hoping for better times while others are chopping off prices with loan installments digging deeper in their pockets.
Property prices in Bulgaria’s second largest city of Plovdiv have seen the biggest rise growing 11% followed by Dobrich with some 9%. The increase hovers around 5% in the other regional cities. Prices took the opposite direction in nine of the major areas with Shumen posting an 8% drop. Home prices in Varna, Bulgaria’s biggest Black Sea city, registered their first fall, be it a tiny BGN 8 per sq. m. Sofia retained the lead as Bulgaria’s most expensive city offering BGN 2 470 per sq. m., a 6.8% rise. The runner-up was Varna with BGN 2 129 per sq. m.
Source: Dnevnik
Macroeconomic news and statistics
Govt and Business to hold first crisis talks
The Bulgarian government and companies will meet for the first time since the global turmoil exploded to outline and seek ways to address possible negative implications. The conference The financial crisis: Bulgaria in the Global Economy will be held on October 28 by the Confederation of Employers and Industrialists in Bulgaria and Capital weekly.
TAmong the participants are Prime Minister Sergei Stanishev, deputy prime minister and interior minister Ivailo Kalfin, World Bank representatives, head of the IMF’s technical mission in Bulgaria during the introduction of the currency board, Fabio Ganzer, Shell international department head, and Ivo Prokopiev, CEIB chairman and publisher of Capital and Dnevnik, to name but a few.
Source: Dnevnik
CORPORATE news
Kremikovtzi AD [4KW]
Govt backs Arcelor Mittal as tension builds up at Kremikovtzi
Things atKremikovtzi are worsening with every passing day, as the plant has suspended production and is only kept in workload mode in the face of dwindling raw materials, an unnamed operating manager said. „The severe money shortgage has squeezed all supplies to the minimum possible levels,” the official said.
High-ranking sources say Vorskla Steel has backed out of its tolling agreement due to liquidity problems, proving bondholders’ fears that the partnership was too risky for the plant. Angelo Moskov, of investment fund QVT, Kremikovtzi’s biggest bondholder, warned in July that the tolling contract was not bonding for Vorskla Steel and that the Ukrainian company could easily walk out on it.
Meanwhile, economy minister Petar Dimitrov said he had invited Arcelor Mittal to consider again entering into a tolling agreement. Two domestic and one foreign company are also considered. Approached for comment, Arcelor Mittal said the government had not moved an inch from its position but pledged to return if it receives support.
Separately, deputy environmental minister Chavdar Georgiev said Kremikovtzi’s failure to obtain an integrated pollution prevention and control permit within the required deadline will not have an effect. He said the licencing procedure may be resumed if the mill’s creditors agree not to shut down the plant and to go ahead with the investment plan. He also said the delay will trigger no new sanction for Kremikovtzi (which is currently not paying its monthly BGN 107,799 in pollution fines).
Source: Dnevnik
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