Commentary
Bulls finished tied vs. Bears
The trade on the Bulgarian Stock exchange during the week was mainly influenced by the published unconsolidated financial reports for the first quarter of the year. As opposed to the expectations of some of the market participants the financial statements did not give the market the long awaited impetus for sharp appreciation as the statements raised mixed feeling in the investment public and partially confirmed the expected deterioration of corporate profits due to the increased inflation pressure in the economy. Finally the stocks from the stock indexes that rose were fully neutralized by the depreciated ones which resulted in an absolute zero change in the value of the main index SOFIX, which stayed at 1147.84 or exactly equal to its level from the end of last week. The positive sentiment towards some of the companies during the week was provoked by the better than expected financial performance in Q1 2008, including the producer of fertilizers Neochim [NEOH] which appreciated by 20.2% for the five trading sessions after reporting 3.5 times higher net income for the first three months of the year. Another positive surprise was offered by the wood processing company Fazerles [FZLES], whose shares appreciated by 4.5% during the last two days, due to better operating performance and increased profit margins. On the other side were the shares of the industrial minerals producer Kaolin [KAO] which disappointed the investment public with poor financial performance, as well as the wood processing company Lesoplast [LESPL], which registered an operating loss for the first quarter of the year. As a result both of them depreciated significantly, Lespolast plunging by 14% the day the financial reports were released and Kaolin falling by 8.7 % for the five trading sessions.
The leading oil products retailer in Bulgaria Petrol[PET] ranked for a consecutive week among the top winners on the BSE. The closing price on Friday (April 25) was 20.9% higher w-o-w, provoked by the news that the long lasting legal dispute with leading oil processing company in the country Lukoil Bulgaria came to an end after the two rivals signed an out-of-court agreement fixing up the quarrel. Thus after one of the minority shareholders transferred 18.84% of the share capital through the stock exchange on April 2 the price skyrocketed by 93.4% closing at an all-time high of BGN 8.40 on Friday.
The major part of the public companies have not yet published their quarterly financial statements and these will be in the focus of the investors' attention during the two trading sessions next week (April 28, May 1 and 2 are official holidays in Bulgaria).
The report also includes:
market Trends
SOFIX (chart)
BG40 (chart)
market Statistics
| Segment | Volume (BGN) | Deals |
| Trading in Equities | 8 725 331.31 | 6315 |
| Weekly Chng | -74.43% | -31.75% |
| Trading in Corp. Bonds | 6 685 127.60 | 39 |
| Weekly Chng | -6.08% | 62.50% |
| Block Trading, Equities | 25 097 943.70 | 244 |
| Weekly Chng | -38.38% | -15.57% |
| market Capitalization: | BGN 22.06 bln / EUR 11.28* bln |
* The Bulgarian Lev is pegged to the Euro at BGN 1.95583 per EUR 1.00.
BG40 Stocks, April 25, 2008 (table)
Gainers & Losers*
| TOP GAINERS | Ticker | Sector | Weekly Chng |
| Peshtoremont AD | PESRE | machinery | + 27.62% |
| Neochim AD | NEOH | chemical | + 20.24% |
| Petrol AD | PET | oil trading | + 17.70% |
| TOP LOSERS | |||
| Energoremont Holding AD | ERH | machinery | -16.78% |
| FairPlay Properties REIT | FPP | REIT | -13.37% |
| Zlatni Pyasatsi AD | ZLP | tourism | -10.87% |
* Gainers: Among shares with turnover above BGN thnd 50; Losers : Among shares with turnover above BGN thnd 20
Main Economic Indicators
| 2004 | 2005 | 2006 | |
| GDP, in bln EUR | 19.57 | 21.45 | 25.10 |
| GDP, real growth, % | 6.6% | 6.2% | 6.1% |
| Inflation, year-average, % | 6.2% | 5.0% | 7.3% |
| Unemployment, year-average, % | 12.0% | 10.1% | 9.0% |
| Fiscal Balance, % GDP | 1.7% | 2.3% | 3.7% |
| Gross Public Debt, % GDP | 43.2% | 33.4% | 25.5% |
| Current Account, % GDP | -6.7% | 12.2% | -16.3% |
| Foreign Direct Investment, % GDP | 14.0% | 14.5% | 16.8% |
Yield Curves: Bulgaria vs. Eurozone (chart)
East European Markets
| index | Value | Weekly Chng | YTD Chng |
| Bulgaria SOFIX | 1147.84 | 0.00% | -35.07% |
| Croatia CROBEX | 3 757.73 | 4.08% | -28.27% |
| Macedonia MIB-10 | 5 750.46 | 1.02% | -25.71% |
| Montenegro NEX20 | 23 195.12 | 11.57% | -32.12% |
| Romania BET-C | 6 974.90 | 0.68% | -29.01% |
| Russia MICEX10 | 1 668.86 | -2.21% | -11.65% |
| Serbia BELEXline | 1 571.71 | 2.46% | -32.21% |
| Turkey ISE-100 | 43 593.80 | 2.23% | -21.51% |
| Ukraine PFTS | 855.21 | -6.40% | -27.16% |
| Morgan Stanley MSCI EE (€) | 615.22 | -0.32% | -15.20% |
news of the week
Economics
- In April the general Business climate indicator advancedby 0.5 percentage points above the March level, increasing for a fourth consecutive month, the National Statistical Institute announced.
- The financial wealth of the population stood at BGN 31.3 bn [EUR 15.85 bn euro] at the end of the first quarter of 2008, according to industry Watch's annual report It is 28.5 % higher compared to the same time last year. Bank deposits are 30 per cent up from Q1'2007, and have doubled since 2001, equalling 35 per cent of GDP.
Politics
- The parliament approved the cabinet reshuffle proposed by the Prime Minister Sergei Stanishev. The leaders of the three-party coalition acknowledged that the structural and personnel changes are belated.
- The average retirement age to rise from 64.1 to 68 years of age, the updated employment strategy of Bulgaria 2008-2015 envisages, announced by the Ministry of Labor and Social Policy.
- A little over EUR 200 million euro has been earmarked fortourism development. The funding targets mostly the development of infrastructure in areas with the potential to develop tourism.
Corporate Sector
- Petrol PLC [PET] and Lukoil Bulgaria signed an out-of-court agreement for settling all outstanding issues between them. As a part of the deal Petrol [PET] is going to sell to Lukoil 75 oil stations, situated in different regions of the country, as well as the leading in market and technological aspect oil base “Ilianci” in Sofia. The oil stations are valued at EUR 156.1 mln. and the price of oil base “Ilianci” comes out at EUR 80.9 mln. In this way the two companies shall settle the 15-years long disputable contract for delivery of fuels and replace it with two new contracts for delivery of fuels for the stations of PET and for the wholesale devision of PET Nafteks Petrol. After the approval of the Commission for Protection of the Competition for the deal was received, the contracts come into force.
- Energoremont holding [ERH] signed three new contracts with the Termo-Electrical Plant Maritza-Iztok 2. The total value of the three contracts amounts to BGN 4.54 mln. The agreements were signed on April 8, 2008.
- At the GSM of Stara Planina Hold [CENHL], scheduled for June , 2008 the shareholders will vote on a proposal for shares buyback of up to 3% from the share capital as well as for authorizing of the management Board to undertake capital increase up to BGN 100 mln. in course of 5 years after the change in the articles of association is registered.
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