market WRAP-UP
The last week of August ended without big fluctuations. The releases of the H1 consolidated reports on Thursday and Friday supported the current market levels. Except for BGREIT which lost altitude to 86.51 points (-1.2%) due to the sell pressure on the REIT sector, all other indices closed unchanged: SOFIX 1027.99 points (+0.2%), BG40 251.24 points (-0.4%), BGTR30 664.45 points (no change). The summer lethargy continued reflecting the poor liquidity, although some of the companies attracted investors: Alcomet (6AM) jumped by 8.6% to BGN 6.20 and Monbat (5MB) increased to BGN 12.021 (+6.3%). The latter has been supported by the buy-back operation which started 2 weeks ago.
news HIGHLIGHTS
- Gross external debt added EUR 3.8bn in H1 2008to EUR 31.9bn, or 97.2% of GDP. Private borrowing rose EUR 3.9bn over the period, to EUR 28bn, while public external debt decreased by EUR 155m to EUR 3.9bn. Net external debt increased by EUR 2.8bn to 13.9bn or 42.3% of GDP.
- The average hotel occupancy rate decreased to a record low of 27% in H1 2008, down 5% vs. H1 2005, caused by surplus of resort beds. The average booking was BGN 38 per night.
- Bulgarian Real Estate Fund [5BU, ex-BREf] cancelled the sale of its project Kambanite, consisting of a Business center and a parking lot with a total area of 16.8 sq. m. The preliminary sale price was set at EUR 20.9m excluding VAT.
- Putstroy EAD, a subsidiary of Holding Roads [6H2] signed a BGN 1.3m contract for street repairs wih Lovech municipality. In July, the same subsidiary signed two more contracts for road repairs worth BGN 150k and BGN 4.4m, respectively.
- Trace Group Hold [T57], together with two other companies, signed a contract worth BGN 142m with the Ministry of Transportation for the second extension of Sofia Subway.
- Sopharma [3JR] increased its stake in the Ukrainian OAO Vitamini to 99.07% vs. 79.01% before.
- Holding Varna [5V2] plans to increase its share capital from BGN 2.1m to BGN 5.2m and raise more than BGN 68m on the market by issuing 3.1m new shares with nominal value BGN 1 and issuing price of BGN 22.
- Central Cooperative Bank [4CF] extraordinary shareholders’ meeting on Oct 10th will vote to authorize capital raises of up to BGN 30m over a period of 5 years.
- Alu Plast, a manufacturer of PVC and aluminium windows and doors, plans an ipo in order to double the capacity and broaden the operations to Romania and Greece.
SOFIX/ BG40 (chart)
BGTR30/ BG REIT (chart)
| Change | SOFIX | BG40 | BGTR30 | BGREIT |
| 1-wk | 0.20% | -0.40% | 0.00% | -1.20% |
| 3-mo | -17.40% | -27.90% | -20.50% | -10.90% |
| YtD | -40.80% | -51.40% | -38.80% | -17.40% |
| 12-mo | -35.50% | -39.50% | -33.60% | -13.50% |
Top Gainers*
| Alcomet [6AM] | 8.60% |
| Toplivo AD [3TV] | 6.60% |
| Monbat [5MB] | 6.30% |
Top Losers *
| Bulgartabac Holding [57B] | -19.40% |
| Biovet [53B] | -9.50% |
| Synergon Holding [6S7] | -6.20% |
* from our list of selected stocks (see last page)
| Turnover statistics | Week 35 |
| Weekly volume (shares) | 24 608 067 |
| Avg. weekly volume YtD | 12 236 808 |
| Weekly turnover (BGN) | 73 857 834 |
| Avg. weekly turnover YTD (BGN) | 56 762 816 |
FIXED INCOME AND MACRO DATA
Most recent macro data
| BGN/EUR exchange rate | 1.95583 |
| Inflation (HICP, YoY July) | 14.40% |
| Inflation (HICP, cumulative 2008) | 7.20% |
| GDP Growth (YoY Q2 2008) | 6.30% |
| Unemployment (July 2008) | 5.90% |
| Public External Debt/GDP (July '08) | 11.90% |
| FDI Jan-June '08 (EUR) | 2.1bn |
| C/A Deficit/GDP (Jan-June '08) | -11.50% |
Source: BNB; NSI; National Employment Agency
| Type Coupon | Coupon | Maturity | Currency | Yield (%) |
| Treasuries | 3.75% | 16-Feb-10 | BGN | n.a. |
| Treasuries | 4.75% | 11-Feb-11 | BGN | n.a. |
| Treasuries | 5.20% | 04-Feb-14 | BGN | n.a. |
| Eurobonds | 8.25% | 15-Jan-15 | USD | n.a. |
| Sofibor | Overnight (ON) | BGN | 5.37 | |
| Sofibor | 3-month | BGN | 7.31 | |
| Sofibor | 12-month | BGN | 8.69 | |
| Base Interest Rate | BGN | 5.25 |
Source: BNB; UBB
news IN THE SPOTLIGHT
Industrial Holding Bulgaria [4ID]
FSC approved the convertible bond prospectus of IHLBL
On 28 August 2008, the Financial Supervision Commission (FSC) approved the Prospectus of Industrial Holding Bulgaria (IHB) for the placement of convertible bonds through rights where each current share (current number of shares: 43 756 118) gives one right to its holder and 200 rights are needed to acquire one bond. The total value of the issue is BGN 21 878 000 distributed in 218 780 dematerialised, freely transferable, interest-bearing, unsecured bonds, each with a nominal and issue value of BGN 100. They have a 3-year maturity and will give an annual fixed interest of 8% paid out semiannually.
The bondholders will have the option to convert their bonds into shares at maturity, as well as at the fourth interest payment (at the end of the second year) at a conversion ratio valid at the time of conversion. The initial conversion ratio is set at 12 new shares for each bond, which makes for a conversion price per new share of BGN 8.(33). If at any time from the issue of the bond till its maturity IHB decides to raise capital via new shares or to distribute stock dividend, the conversion ratio will have to be adjusted accordingly.
The bond will be utilized by the Group to finance projects of its maritime Business, namely the construction of ships in Bulyard Shipbuilding industry for its future shipping line of Business, and the expansion of the port terminal at Dockyard Port Bourgas.
Source: FFBH
H1 2008 CONSOLIDATED FINANCIAL RESULTS
Synergon Holding [6S7]
Profitability continued to deteriorate in H1 of 2008 at Synergon Holding
Energoremont Holding [6EG]
Revenues of Energoremont Holding grow by 7%
Enemona [E4A]
Enemona shows strong Q2 results
Monbat [5MB]
Monbat revenues in the month of July at BGN 12m, up 15.5% YoY
Agria Group Holding [A72]
Agria’s net income increases 86% YoY to BGN 1.6m
Albena [6AB]
Albena’s sales jump 53% YoY, net income in Q2 remains negative
Holding Roads [6H2]
Holding Roads sales increase 29% YoY in H1, net profit down 70% YoY
Trace Group Hold [T57]
Trace Group Hold reports consolidated net loss over H1
Bulgarian River Shipping [5BR]
Bulgarian River Shipping consolidated net profit grows 29% YoY in H1
CorporateCommercial Bank [6C9]
Total loans increased by 8% MoM in July at CORP
SELECTED STOCKS INDICATORS (table)
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