Commentary
Consolidated reports in the spotlight
The release of the preliminary consolidatedfinancial reports for 2007 could not revitalize the trade on the BSE and the narrow index SOFIX registered a modest growth of 1.15% for the week. Similar to the nonconsolidated reports, posted at the end of January, the favourable effects of positive results on the quotes were a rare case or very short-lived, which comes to no surprise given the current conditions on the market. The red colour continued to dominate with more than half of the BG 40 components finishing the week on negative territory.
A kind of an exception was the case with one of the newest companies on the BSE - Billboard [BOARD] which released a very strong 2007 consolidated report - the prinhouse's net profit reached BGN 5.2 mln. against BGN 2.2 mln. expected by the management and nearly 200 % higher compared to 2006. As a result the shares of Billboard ended the week at BGN 9.21 or 7 % higher from the close price a week ago, and 26 % above its issue price from the ipo, held in December 2007.
The Financial Supervision Commission approved the ipo prospectus of Investbank at the beginning of the week. The bank has the intention to increase its capital with 10 mln shares, up to BGN 80 mln. The price range of is set at BGN 5.90 - BGN 7.20 per share, which in case of a successful ipo, corresponds to a minimal market capitalization of BGN 472 mln. Investbank is one of the few banks with a Bulgarian owner, as 70.1 % of the shares are owned by Festa Holding AD.
With a decision of the Financial Supervision Commission the prospectus of another potential public company - the meat-processing company Mekom was changed in the part setting the minimum number of shares to be subscribed so that the ipo is considered successful. That number is decreased from 10 mln. to 2.5 mln., i.e 23.4 % of the offered quantity. The ipo was supposed to take place on January 23, 2008 but was postponed by 44 days, i.e to March 7, due to the unfavorable market conditions. The minimum issue price is set at BGN 2.2 per share which corresponds to BGN 23.5 mln. market cap.
The report also includes:
market Trends
SOFIX (chart)
BG40 (chart)
market Statistics
| Segment | Volume (BGN) | Deals |
| Trading in Equities | 4 879 531.88 | 8456 |
| Weekly Chng | -49.46% | 18.45% |
| Trading in Corp. Bonds | 1 257 148.88 | 15 |
| Weekly Chng | -70.70% | 50.00% |
| Block Trading, Equities | 24 577 336.22 | 186 |
| Weekly Chng | -19.99% | 5.10% |
| market Capitalization: | BGN 25.84 bln / EUR 13.21* bln |
* The Bulgarian Lev is pegged to the Euro at BGN 1.95583 per EUR 1.00
BG40 Stocks February 29, 2008 (table)
Gainers & Losers*
| TOP GAINERS | Ticker | Sector | Weekly Chng |
| Elprom Zem | ZEM | machinery | + 13.11% |
| Bulgarian American credit Bank | BACB | banking | + 10.69% |
| Monbat | MONBAT | machinery | + 8.62% |
| TOP LOSERS | |||
| Serdikom | SERDI | renting of real estate | -39.83% |
| Petrol | PET | oil trading | -26.63% |
| Polimeri | POLIM | chemical | -21.12% |
* 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 | 4 232.27 | 1.15% | -19.14% |
| Croatia CROBEX | 1429.56 | -2.95% | -19.38% |
| Macedonia MIB-10 | 7 056.08 | -1.79% | -6.13% |
| Montenegro NEX20 | 44 776.88 | -0.69% | -12.88% |
| Romania BET-C | 1 102.08 | -3.39% | -8.67% |
| Russia MICEX10 | 2 924.44 | -3.48% | -19.22% |
| Serbia BELEXline | 3 498.76 | -0.65% | -8.85% |
| Turkey ISE-100 | 30 273.16 | 1.49% | -11.40% |
| Ukraine PFTS | 5 202.33 | 2.36% | -21.95% |
| Morgan Stanley MSCI EE (€) | 639.83 | -2.27% | -11.81% |
news of the week
Economics
- In February 2008 the economic climate remains favorable, data by the National Statistics Institute shows. The total Business climate indicator rose by 0.9 percentage points above the January level, due to more optimistic estimates of managers in the sectors of construction, real trade and services.
- The Producer Price index in January 2008 increased by 13.2 % on an annual basis, and by 0.8 % on a monthly basis, announced the National Statistical Institute [NSI].
- Bulgaria's 2007 gross external debt amounts to EUR 27,039.7 million (94.6% of GDP), which is 34.5% higher compared to 2006, BNB announced.
Politics
- The Minister of Transport Peter Moutafchiev indicated that Bulgaria has advanced with the infrastructure projects. The construction works on Danube Bridge 2 are expected to commence in April this year and be completed in 2010.
- The official statement of the Finance Ministry after auditing the public procurement procedures at the National Road Infrastructure Fund (NRIF) is that there are no abuses. The audit of the fund was required by the European Commission.
Corporate Sector
- Polimeri Devnia [POLIM] announced its intentions to make a capital increase through the issuance of 50 mln. new shares. Against every existing share the shareholders shall have one right to subscribe 9.39 new shares. Thus, if all rights are subscribed the capital shall be increased from BGN 5.324 mln. to BGN 55.324 mln. This week the company signed a contract at the value of BGN 2.3 mln. for the delivery of a new installation for synthesis of hydrochloric acid. The facility shall be assembled within 10 months and its production capacity will be 120 ths. tones of hydrochloric acid per year.
- Energoremont Holding [ERH] and theNational Railway Infrastructure company signed a contract at the total value of BGN 10.7 mln. In the execution of the project ERH will engage a subcontractor who will be entitled to receive 27.7% of the total value of the contract.
- Billboard PLC [BOARD] is going to establish a new subsidiary - Heatset, with BGN 5 ths. capital, divided into 50 stakes with nominal value BGN 100 each. The activities of the company shall include offset printing, digital printing, advertising etc. The aim with which the company is established is implementation of the project for the new printing base in Kostinbrod.
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