Overview
indices Mostly Up, Volumes Remain Low
indices mostly rose on the week as SOFIX advanced by 1.6% to 276.87 and BG40 added 0.56% to 90.10 with both recording gains in three of the sessions and losing in two of the days. For now stocks remain above rock bottom but trading volumes are far from inspiring and investors are still alert for further deterioration of corporate profits or worrying macroeconomic news. The trading volume in shares remained low, reaching BGN 10.5 for the past five sessions, below the BGN 16.2 mln for the week before.
One of the companies that seemingly disappointed with its preliminary 2008 results was paint maker Orgachim [5ORG; -8.54%], which late on Friday released its financial statement. Orgachim turned to a net loss of BGN 1.9 mln last year from a profit of BGN 6.76 mln in 2007 as sales dropped dramatically in the fourth quarter and operating expenses grew faster than revenues. The stock was under selling pressure on Monday and fell by 8.05% for the day. It ended on Friday at BGN 63.64 in a turnover of BGN 231,365. Also in focus was Investor.BG [4IN; +2.67%], which on Monday said a fund controlled by Cisco Systems has bought 16.77% of its share capital. The stock rose by 2.7% on Monday and closed higher on the week at BGN 11.4 with a weekly turnover of BGN 83,829. The fund paid BGN 12.39 per Investor.BG share.
Enemona AD [E4A; +6.42%] during the week announced that it is seeking a strategic investor for its energy complex project Lomski Ligniti, which is expected to cost up to BGN 1.5 bn. Also in the past week it said it plans to seek up to BGN 30 mln through the issue of preferred shares. The stock rose by 6.42% on the week and closed at BGN 7.08. company stocks worth a total of BGN 268,367 changed hands last week. Holding Roads [6H2; +32.45%] also performed well. The stock, which in the previous week slumped by 20.49%, ended this week 32.45% higher. The share jumped by 13.27% on Thursday alone and closed at BGN 2.04 in a turnover of BGN 137,805. Still, the top performer was a less liquid share - Holding Coop-Yug [4CG; +32.45%]. The stock surged by 37.75% on Monday and on Wednesday, the last day it traded, finished at BGN 2.0. The total turnover in the stock was BGN 168,934.
A few REITs were among the most traded in the past week and some of the biggest fallers were also among them. BenchMark Fund Estates REIT [6BMA; -24.07%] lost 24.07% to BGN 0.41 in a turnover of BGN 144,410. Agricultural Land Opportunity Fund Mel Invest REIT [6A7; -22.84%] slid by 22.84% to BGN 0.52. A total of BGN 126,001 of company's shares was traded. The week's most liquid share was Balkan and Sea Properties REIT [5H4; +0.0%], which on Monday traded in a turnover of BGN 5.37 mln. The stock wasn't traded for the rest of the week and it ended flat at BGN 38.
| Value | Weekly Chng | YTD Chng | |
| SOFIX | 276.87 | 1.60% | -22.80% |
| BG 40 | 90.10 | 0.56% | -16.43% |
| BG REIT | 41.11 | -0.80% | -15.29% |
| BGTR 30 | 198.48 | 1.18% | -27.25% |
| Shares Turnover (BGN th) | 10 476.98 |
| Bonds Turnover (BGN th) | 273.59 |
| OTC market Turnover (BGN th) | 2 613.48 |
| Total Turnover (BGN th) | 13 470.12 |
| market Capitalisation (BGN mln) | 10 117.98 |
| market Capitalisation/GDP | 16% |
Trends
SOFIX (chart, table)
BG 40 (chart, table)
Main Economic Indicators (table)
East European Markets (table)
news of the Week
Corporate Sector
- Orgachim [5ORG] turned to a net loss of BGN 1.9 mln from a profit of BGN 6.76 mln in 2007, the annual non-consolidated financial statement of the paints and varnish producer showed. sales increased by almost 4% on the year, to BGN 129.9, but dropped dramatically in the fourth quarter, by 32.5% as compared to the same period of 2007. Operating expenses grew faster than revenues in 2008, by 11.9%, thus EBIT sank to BGN 8 th, vs. BGN 9.9 mln a year earlier. The company booked inventory impairment at the amount of BGN 2.5 mln for 2008. Orgacim’s Supervisory Board decided to close its subsidiaries Deco Casa – Serbia and Policolor – Orgachim – Ukraine in an attempt to minimize future losses.
- Private equity 3TS Cisco Growth Fund is the buyer of the stake of 17% of Bulgaria’s internet company Investor.BG [4IN], the company announced on Monday. Last week more than 2 million shares of Investor.BG changed hands at an average price of BGN 12.39 per share. 3TS Cisco Growth Fund is a joint-venture between CISCO and 3TS Capital Partners. It was established in 2007 and is currently managed by 3TS Capital Partners. The fund is focused on investments in small and mid caps from the technology, media and communication sectors, based in Central and Eastern Europe
- Monbat [5MB] announced the end of its fourth share buyback procedure on Friday. The company has bought back 223 thousand of its shares, or 0.57% of the shareholders’ equity, at an average price of BGN 4.289 between November 19, 2008 and February 12, 2009. Monbat has bought back a total of 596.76 of its shares in the period August 1, 2008 – February 12, 2009, at an average price of BGN 7.06 per share, it added.
- Digital wide format printing company Billboard [5BP] plans to take full control over its peer Tipo Print after buying a 30% stake in the company last year, Billboard’s board chair Kalin Genchev was quoted by Dnevnik daily as saying. The remaining 70% of Tipo Print are held by one of Billboard’s main shareholders – businessman Vasil Genchev. The deal will help raise Billboard’s market share to 45% from 40% currently, the company said earlier. So far there are no plans for the two companies to be merged.
Economy and Politics
- Bulgaria needs to show further progress in the areas of judiciary and the fight against corruption, the European Commission said in its interim report on Bulgaria, released on Thursday. The Commission noted that the country is committed to judicial reform and to fighting corruption and organised crime and it has taken the necessary steps in that direction but still there were no tangible results.
- Global rating agency Standard & Poor's revised its Banking industry Country Risk Assessment (BICRA) on Bulgaria (foreign and local currency BBB/Negative/A-3) to Group 7 from Group 6 on increased economic risks prevalent in the country. “We are concerned about Bulgaria's heightened external vulnerabilities, due to a large current-account deficit, which, amid the continued tightening of credit markets, could lead to an abrupt decline in external financing. (...) We consider banks' credit risk to be high, after several successive years of rapid loan growth that has not been tested in a sustained economic slowdown and due to the high real estate price inflation in Bulgaria over the past few years,” S&P said.
- Bulgaria's 2008 current account deficit stood at EUR 8.3 bn, vs. EUR 6.3 bn in 2007, expanding to a preliminary 24.3% of the projected gross domestic product (GDP), vs. 21.8% of GDP in 2007, the Bulgarian National Bank (BNB) announced. Meanwhile, foreign direct investments (FDI) dropped by EUR 1.1 bn to EUR 5.3 bn in 2008, equivalent to 65.6% of the C/A deficit. Earlier last week the National Statistics Institute announced that Bulgaria's trade deficit widened to a preliminary 26% of the projected GDP for 2008, or BGN 17.3 bn. In 2007, the country's trade deficit accounted for 25.2% of GDP.
- Bulgaria’s December industrial output rose by 1.7% month-on-month, while December industrial sales fell by a 0.4% on the month, according to preliminary data from the National Statistics Institute (NSI).
- New vehicles sales in Bulgaria tumbled by 45.4% y-o-y to 2 204 in January, from 4 309 in the same month of 2007, the country’s car importers union, UIAB, said. In 2008, almost 58 000 new vehicles were sold in Bulgaria, up by 8.02% as compared to the previous year. The car market shrank sharply in the last three months of the year, with December being marked by a dramatic drop of 25.20% y-o-y.
BG40 Stocks (table)
Top Gainers / Top Losers (table)
* Gainers: Among shares with turnover above BGN th 50; Losers: Among shares with turnover above BGN th 20; Percent changes are based on average weighted prices
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