market WRAP-UP
Last week confirmed the uncertainty of the overall picture and most of the investors stood away from trading. The result was low liquidity and the Bulgarian market has been driven mainly by local retail clients. SOFIX lost 4.90% to 467.83 reflecting the drop of one of the most weighted companies included in the index - Holding Roads (6H2, BGN 4.049, -49.39% WoW). BGTR30 also suffered from 6H2's change and slipped 1.2% to 354.72 while BG40 advanced by 1.1% to 142.77 REIT market continued its way down and BGREIT lost 2.7% to 53.45 reflecting the decline in share prices of most of REIT funds under the nominal value of BGN 1.
news HIGHLIGHTS
- Bulgaria’s fiscal reserve as of end Sept. totaled BGN 12bn, announced the Ministry of Finance.
- Bulgaria is in for a slowdown of the economic growth, consumption and investment, the European Commission said in its autumn report.
- The expensive deposits campaigns carried out by the banks in the last ten months gave positive results. For the 9 months of 2008, they gathered over BGN 2.1bn from households and businesses with almost 72% of them gathered by four credit institutions: United Bulgarian Bank, Raiffeisenbank, First Investment Bank and UniCredit Bulbank.
- The IT sector generated revenues of €3.3bn in 2007 and is headed to reach revenues of €3.8bn in 2008
- The parliamentary budget committee accepted a new regulation for higher cigarettes excise taxes, which favour cheap brands over expensive ones.
- Pension funds expect to post a negative return for 2008 after posting a nominal 17-20% last year.
- The Agriculture and Rural Development European Commissioner proposed a 1-year extension of the period in which Bulgaria can use funding under the SAPARD programme.
- Investors have slowed down or halted industrial and logistics centre projects in the face of administrative hurdles and a worsening global financial market, showed a research of property consultants Colliers International.
- Kremikovtzi [4KW] could close down before the end of November if a new investor is not found, the operative management of the plant alarmed.
- The production sales of Sopharma [3JR] went up 6% YoY in October compared to 46% YoY increase in September, as a result of planned price increases on main export markets from 1 October.
- Zarneni Hrani Bulgaria [T43] opened its new EUR 15m biofuel plant in the town of Provadia. The plant can process sunflower, soya and rape seeds.
- The Pleven processing plant of Bulgaria’s tobacco monopoly Bulgartabac [57B] will go private on the stock exchange, said the buy-side advisory team of the holding company.
SOFIX / BG40 (chart)
BGTR30/ BG REIT (chart)
| Change | SOFIX | BG40 | BGTR30 | BGREIT |
| 1-wk | -4.9% | 1.1% | -1.2% | -2.7% |
| 3-mo | -53.4% | -43.9% | -46.4% | -40.1% |
| YtD | -73.1% | -72.4% | -67.3% | -49.0% |
| 12-mo | -74.9% | -74.9% | -69.6% | -48.0% |
Top Gainers*
| Kapitan Diado Nikola [3KN] | 20.5% |
| Petrol [5PET] | 14.9% |
| Agria Group Holding [A72] | 7.1% |
Top Losers *
| Holding Roads [6H2] | -50.1% |
| Bulgartabac Holding [57B] | -14.8% |
| Industrial Holding Bulgaria [4ID] | -12.8% |
* from our list of selected stocks (see last page)
| Turnover Statistics | Week 45 |
| Weekly volume (shares) | 4 256 903 |
| Avg. weekly volume YtD | 12 090 666 |
| Weekly turnover (BGN) | 12 512 092 |
| Avg. weekly turnover YTD (BGN) | 49 373 849 |
Source: Bulgarian Stock exchange
FIXED INCOME AND MACRO DATA
Most recent macro data
| BGN/EUR exchange rate | 1.95583 |
| Inflation (HICP, YoY Sep) | 11.4% |
| Inflation (HICP, cumulative 2008) | 8.0% |
| GDP Growth (YoY H1 2008) | 7.1% |
| Unemployment (Sept 2008) | 5.8% |
| Public External Debt/GDP (Aug '08) | 11.7% |
| FDI Jan-Aug '08 (EUR) | 3.0bn |
| C/A Deficit/GDP (Jan-Aug '08) | -14.0% |
Source: BNB; NSI; National Employment Agency
| Type | Coupon | Maturity | Currency | Yield (%) |
| Treasuries | 3.75% | 16-Feb-10 | BGN | 8.29 |
| Treasuries | 4.75% | 11-Feb-11 | BGN | 8.31 |
| Treasuries | 5.20% | 04-Feb-14 | BGN | 8.32 |
| Eurobonds | 8.25% | 15-Jan-15 | USD | 9.44 |
| Sofibor | Overnight (ON) | BGN | 5.66 | |
| Sofibor | 3-month | BGN | 7.84 | |
| Sofibor | 12-month | BGN | 9.14 | |
| Base Interest Rate | BGN | 4.96 |
Source: BNB; UBB
news IN THE SPOTLIGHT
Kremikovtzi 4КW
Vorskla Steel wins a case for BGN 5m against Kremikovtzi
After reports about an expressed interest in Kremikovtzi from Ukraine's richest man Rinat Akhmetov, Akhmetov’s company published a rebut on its website and it transpired that the one who has met with the Prime Minister to discuss the terms and conditions of entering into a tolling agreement and potential longer-term strategic alliance with the troubled steel maker is Vadim Novinskyi, through his Smart Group. Smart Group is the owner of Promet Steel in Debelt, the most modern steel plant on the Balkan Peninsular, but much smaller than Kremikovtzi. A representative of the bondholder committee expressed concerns whether Novinskyi has the required potential to partner with Kremikovtzi.
In a separate development, the court decision that appointed as a receiver Ana Milenkova has been declared void, as her candidacy was supported by 48.37% of the creditor votes, whereas the required rate is 50% + 1 vote. Milenkova is considered the receiver of choice of the State. The other appointed receiver, Cvetan Bankov, was supported by the bondholders.
And finally, in another court development, Vorskla Steel, Jevago’s company that operated Kremikovtzi under a tolling agreement signed in July and cancelled in October, won a case in court which affirmed the ownership right of Vorskla Steel over the supplied raw materials and the manufactured production. Kremikovtzi owes over €5m or 28 000 tons of production for which the Ukrainian company has supplied 60 000 tons of raw coal. Source: Dnevnik, Novinite.com, FFBH
Holding Roads 6H2
HDPAT to vote bonuses for management and Supervisory Board members
On December 19 Holding Roads shareholders will vote at an extraordinary GSM on the distribution of cash bonuses for management and Supervisory Board members. If voted, Vasil Bojkov – chairman of the Supervisory Board should receive BGN 3.8m. management board chairman Orlin Hadzhiyankov is set to receive BGN 100k and deputy chairman Philip Stoyanov BGN 60k.
The bonuses proposal stems from the good results achieved by Holding Roads in 2007 when its net profit amounted to BGN 16m.
Additionally the shareholders will decide on the set up of an audit committee. Source: Dnevnik; FFBH
FINANCIAL RESULTS
Orgachim 5ORG
Slowing revenues growth in Q3
SELECTED STOCKS INDICATORS (table)
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