Overview
Stocks Keep Dropping in Volatile market
Bulgarian stocks dropped further during the past week in volatile trading with gains and losses surpassing 10% in the course of some trading sessions. Overall, the blue-chip index fell by a weekly 14.56% to 334.46 and the BG40 index shed 14.54% to 100.34 in the past five trading days. BG40's value was lower than the 100 points at which it started in 2005 in three of the sessions. Investors are clearly shying away from buying despite attractive valuation levels - on Friday the P/E of shares included in the SOFIX index was as low as 5.23%.
However, this is not surprising bearing in mind that bad news keeps coming - Monbat [5MB] on Thursday said it ill lay off 120 of its employees in an attempt to cut costs, following an announcement of the country's sole pistons factory Druzhba Razgrad [4DU] on Monday that it will reduce its staff in order to weather the crisis. Druzhba Razgrad slumped by 73.5% for a week to end at BGN 10 on Friday, becoming this week's biggest loser. Shares in the company worth BGN 4,308 were traded in the five sessions. Monbat's shares were also on the losing side - they slumped by 25.6% for a week and closed at BGN 3.97 on Friday in a weekly volume of BGN 872,800. In the meantime, Monbat continues its share buyback programme aimed at supporting its stock, which had lost 74.65% since the end of last year, amid collapsing prices.
Rises were rare and only three of the BG40 members ended the week higher, out of a total of 19 gainers among the shares that traded. Petrol AD [5PET] was not the top gainer but it was certainly the most liquid among them. Large packages of the stock were changing hands in four of the days, bringing the total volume of traded shares to BGN 98.5 mln. Petrol added 15.07% for a week to BGN 10.5. Between 2.3 million and 2.7 million Petrol shares were traded in each of the four days.
Albena Invest Holding [5ALB] also gained ground after on Friday Albena AD [6AB] said it plans to sell its 47.83% stake in the holding company at a price between BGN 7.11 and BGN 10.15 per share. The holding company jumped by 18.84% to BGN 4.93 on Friday and thus appreciated by a weekly 14.7% in a volume of BGN 84,209.
The week's top gainer was CBA Asset management [C81]. The stock surged by 47.93% to BGN 2.23 in a volume of BGN 41,413.
| Value | Weekly Chng | YTD Chng | |
| SOFIX | 334.46 | -14.56% | -81.08% |
| BG 40 | 100.34 | -14.54% | -80.63% |
| BG REIT | 46.39 | -11.55% | -55.07% |
| BGTR 30 | 267.11 | -11.48% | -75.66% |
| Shares Turnover (BGN th) | 112 255.68 |
| Bonds Turnover (BGN th) | 783.79 |
| market Capitalisation (BGN mln) | 12 155.34 |
| market Capitalisation/GDP | 19% |
Trends
| Top Gainers | Ticker | Chng | Top Losers | Ticker | Chng |
| Petrol AD | 5PET | + 15.03% | Velpa-91 | 4V9 | -49.04% |
| Euroins Insurance | 5IC | + 7.61% | Decotex | 4DE | -48.62% |
| Web Media Group | 45W | + 7.41% | Slanchev Bryag | 3JL | -47.22% |
| P/E, ttm | Value | Weekly Chng | YTD Chng | Turnover(BGN th) |
| 5.23 | 334.46 | -14.56% | -81.08% | 8 071 |
SOFIX (chart, table)
BG 40 (chart, table)
Main Economic Indicators (table)
East European Markets (table)
news of the Week
Corporate Sector
- Monbat [5MB] said on Thursday it will reorganize its production process and will lay off 120 employees in an attempt to significantly reduce expenses amid the increasingly negative influence of the economic crisis. Earlier during the week Monbat said it plans to launch its fourth share buyback procedure. The company plans to buy back up to 0.57 % of its share capital, or up to 223,000 shares, at a minimum price of BGN 4.0 and a maximum price of BGN 7.0 per share. The buyback will be launched on November 18 and will continue for up to 180 days.
- 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 and affirmed its longand 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).
- Shareholders of Albena will vote on a proposal that the company offers for sale its 47.83% stake (2.63 mln shares) in the capital of Albena Invest AD on an extraordinary shareholders’ meeting scheduled for January 18, 2008. Albena AD intends to offer the shares at a price range of BGN 7.11 – 10.15 per share. The shareholders will also vote on a proposal that the company acquires 100% of the capital of Intersky Ltd, which are currently held by Albena Invest, for a total BGN 26.573 mln. The main assets of Intersky are the Lesnovo airport and a license to act as an airport operator.
- Billboard reported 9M consolidated revenues of BGN 20 mln. The growth of the sales slowed down to 35% y-o-y, from 42% y-o-y in H1 08. Operating expenses rose by 39% y-oy, faster than revenues. EBITDA jumped by 26% y-o-y to BGN 6.5 mln. but EBITDA margin shrank to 32%, vs. 34% in H1. Net income totaled BGN 1.4 mln, up 54% y-o-y, vs. 133% y-o-y in H1.
Economy and Politics
- Foreign direct investments (FDI) in Bulgaria decreased by 22.4% to EUR 3659.8 mln (10.8% of GDP) for the first nine months of the year, vs. EUR 4715.2 (16.3% of GDP) for the same period in 2007, Bulgarian National Bank data showed. FDI covered 68% of the current account deficit as compared to 120.9% a year earlier. At the same time Bulgarian direct investment abroad jumped to EUR 414.5 mln from EUR 140.1 mln for the same period in 2007.
- Bulgaria's unemployment rate fell to 5.85% in October from 6.73% a year earlier but rose slightly compared to September, when it was 5.8%. The number of registered unemployed people in October was 216,644, down 13.1% y-o-y.
- Bulgargaz intends to seek a 25.88% rise in the price of natural gas to BGN 678.04 (USD 434 / EUR 344) per 1 000 cubic metres from the beginning of January 2009, the company revealed on Monday. The hike would reflect the fact that the price that the state regulatory commission approved was 12.62% lower than the price sought by Bulgargaz for the last quarter of this year and the weakening of the Bulgarian lev to the US dollar, the company added. The regulatory commission raised gas prices by 23.89% to BGN 538.66 per 1,000 cubic metres at the beginning of October.
- 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.
BG40 Stocks (table)
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Newsletter Weekly 2008.11.17-21.pdf, 393 Kb
