- S&P Revises BACB Outlook to Negative, Ratings Confirmed
- Financial Wealth of Households Still Improving
- Finance Minister: 2009 Budget Can't Fend off All Financial Crisis Effects
Overview
Stocks Bounce Off with Skyrocketing Start
Bulgarian stocks skyrocketed in the first hour of trading on Wednesday following heavy losses in the previous session. The broad BG40 jumped as much as 11.27% by 10:35 local time and the SOFIX rose by 8.29% by then. Later on, gains were lowered - the blue-chip index closed 4.49% higher at 337.09, while hefty gains of the BG40 dwindled to 0.86% at the session's end as the index ended at 97.55.
A large deal in shares of Petrol AD [5PET; -1.1%] boosted the turnover for a third day in a row. Some 2.47 million of the company's shares (about 2.26% of the share capital) changed hands on Wednesday with the stock closing at BGN 9.0, down by 1.1%. On Tuesday 2.702 million shares in the fuel retailer were traded and on Monday 2.7 million of them changed hands.
The second most liquid stock, Corporate Commercial Bank [6C9; +0.00%], ended flat at BGN 65 in a volume of BGN 373,360. Zarneni Hrani Bulgaria [T43; +11.11%] was also among the most liquid positions. It ended 11.11% higher at BGN 0.6 in a volume of BGN 122,268. Holding Varna [5V2; -17.9%] slid 17.9% in a more modest volume to reach BGN 10. Shares in the holding company worth BGN 25,050 were traded. Industrial Holding Bulgaria [4ID; +9.72%], among the most liquid as well, jumped 9.72% to BGN 1.58 in a volume of BGN 112,183.
| Value | Daily Chng | YTD Chng | |
| SOFIX | 337.09 | 4.49% | -80.93% |
| BG 40 | 97.55 | 0.86% | -81.17% |
| BG REIT | 48.14 | -1.39% | -53.37% |
| BGTR 30 | 269.06 | 4.69% | -75.48% |
| Shares Turnover (BGN thnds) | 27 292.17 |
| Bonds Turnover (BGN thnds) | 1 220.93 |
| OTC market Turnover (BGN thnds) | 3 622.95 |
| market Capitalisation (BGN mln) | 11 499.93 |
| market Capitalisation/GDP | 18% |
| Top Gainers | Ticker | Change |
| CBA Asset management | C81 | + 47.93% |
| Energoremont Holding | 6EG | + 23.31% |
| Zarneni Hrani Bulgaria | T43 | + 11.11% |
| Top Losers | Ticker | Change |
| Holding Varna | 5V2 | -17.90% |
| Advance Equity Holding | 6A8 | -10.26% |
| Bulgarian Real Estate Fund | 5BU | -9.87% |
* Gainers: Among shares with turnover above BGN thnd 10;
Losers: Among shares with turnover above BGN thnd 4;
Trends
SOFIX (chart)
| P/E, ttm | Value | Daily Chng | YTD Chng | Turnover (BGN thnds) |
| 4.58 | 337.09 | 4.49% | -80.93% | 1 669 |
Corporate news
S&P Revises BACB Outlook to Negative, Ratings Confirmed
Standard & Poor's revised its outlook on Bulgarian American credit Bank (BACB) [5BN], which is 49.99% owned by Allied Irish Banks, from stable to negative, while it affirmed its long- and short-term counterparty credit ratings. The move reflected “rising economic risks” in Bulgaria and the “growing concerns above the adverse impact on the Bulgarian financial sector, including BACB”. S&P noted that it was particularly concerned about the effect of the slowdown in the “overheated real estate market” on BACB’s asset quality. The agency added that it was also concerned with the rapid loan growth of BACB over recent years, which had “not been tested in a sustained economic slowdown”, and concentration of lending to the real estate, construction, hotel and mortgage sectors (68% of total loans at end-September). The ratings reflects the bank’s “small and specialised business position, increased pressure on asset quality, small absolute level of capital, and reliance on wholesale funding”. On the positive side, BACB benefits from a “successful niche strategy, consistently high profitability and good capitalisation”. Meanwhile, the Financial Supervisory Commission gave green light to the new EUR 35 mln mortgage bond issue of the bank on Wednesday. The coupon is fixed at 7.25% and is payable every six months. Principal is due at maturity. The bond is collateralized with loans from the Bank's portfolio, secured with mortgage(s).
Economy and Politics
Financial Wealth of Households Still Improving
The financial wealth of Bulgarian households is estimated at BGN 33,5 bn for the third quarter of 2008, according to a research conducted by industry Watch. There is however a slowdown in the growth rate of wealth, which has began with the crash of the Bulgarian Stock exchange, analysts from industry Watch said. It was added that the wealth growth was yet larger than the inflation rate. industry Watch forecasted that the trend of wealth growth in the future will be positive. The total estimated value of residential buildings in Bulgarian towns and cities is EUR 76 bn, according to industry Watch. Compared to the other countries in the Euro Area, Bulgarians invest 7 times less in stocks and bonds and 5 times less in retirement funds, the think-tank added.
Finance Minister: 2009 Budget Can't Fend off All Financial Crisis Effects
Measures proposed in the 2009 Draft Budget would not be able to neutralize all of the negative effects of the global financial crisis, the Finance Minister Plamen Oresharski said on Wednesday. "Government spending cannot neutralize all expectations about the unfavorable development of the economy because in addition to all fiscal incentives and buffers it includes, it also has to continue to finance the public sectors", Oresharski said. The Finance Minister added that 2009 budget actually featured record increases of the funding of education, health care, and social programs. The Finance Minister pointed out that Bulgaria did not need assistance from the International Monetary Fund (IMF) in order to fight the effects of the global financial crisis, adding that as a member of the IMF, the country could always resort to such help.
Meanwhile, in an article Financial Times emphasized that Bulgaria was continuing to ignore warning signals that the global financial crisis could have grave effects on its economy, despite its widening current account gap, shrinking foreign investments and decelerating growth.
Upcoming Events
Industrial Holding Bulgaria AD [4ID]
20.11.2008: Industrial Holding Bulgaria will hold bondholders’ meeting at 10:00 a.m. to choose a bondholders' representative and to vote on his/hers remunderation
BG40 Stocks (table)
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Copyright: 2006 Karoll AD. All rights reserved. For further Information please contact Karoll, 57 Hristo Botev Str, 1303 Sofia, Bulgaria |Tel. +359 2 981 13 81, fax: +359 2 986 34 66, e-mail: research@karoll.net, web site: http://www.karoll.net
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Newsletter Daily 2008.11.19.pdf, 56 Kb
