Overview
Stocks Creep into the Green
Investors on the Bulgarian Stock exchange got a breath of fresh air this week as three of the indices ended in the green after massive slumps in the previous week. Only the BG REIT index closed with small weekly losses.
Various measures taken tostem the financial crisis, announced by governments in Europe and the U.S., seem to have done some job in improving sentiment. Optimism was more than evident in early trading on Monday and in Tuesday. In the early hours of Monday the SOFIX index surged by more than 7.4% and on Tuesday the blue-chip index jumped by 7.56%, its strongest daily gain since December 20, 2002.
However, in some of the sessions severe drops were seen. On Thursday panic selling in the U.S. and Asia hit the local stock market as well and the SOFIX sunk 10.35% within minutes of the session's opening. Meanwhile the broader BG40 and BGTR30 lost almost 8%. Later in the session both trimmed losses. Buyers remain cautious and any sign for a global wave of sell-offs triggers selling. Rebounds, as well as declines, are getting quicker than earlier and nowadays it is no surprise to see companies losing a quarter of their capitalization in a few hour's time.
Bulgaria's Prime Minister Sergei Stanishev during the week said that the government is considering defining measures to stimulate interbank loans in an attempt to fight the liquidity squeeze. However, no particular measures have been announced so far and the news hasn't had significant impact on trading.
Still, most of the BG 40 components, 29, rose during the week, while 10 of the stocks included in the broad index lost ground. This week's biggest gainer was Sparky AD [SPV], which closed at BGN 15 on Tuesday, the only day of the week when it was traded, up by 138.1% from its close on October 10. Among the liquid stocks, Media Systems AD [5MS] registered the highest growth during the week. The stock rose by 26.01% to BGN 1.4 as stocks worth BGN 255,983 were traded.
Meanwhile, some aspects of the country's economy remain unaffected by global developments.The country's Lev Overnight index Average, LEONIA, continued to surge to new highs. It reached 6.24% on Thursday, up by 1.7 percentage points since the beginning of the year, while EURIBOR fell by 8 basis points to 5.09%.
market performance (table)
Trends
SOFIX (chart)
BG 40 (chart)
Top Gainers (table)
Main Economic Indicators (table)
East European Markets (table)
news of the Week
- Net interest income of BACB jumped by 31.4% y-o-y to BGN 40.4 mln for the first nine months of the year but in Q3 alone the growth decelerated to 8.4% as compared to the same quarter last year, the Q3 interim financial statement of the bank shows. Net income advanced by 25% y-o-y to BGN 31.0 for the first nine months but dipped by 5% for the last three months alone as compared to the Q3 ‘2007.
- Serbia’s Economy Ministry has halted the implementation of Monbat’s [5MB] EUR 7.0 mln project for a lead recycling plant in the town of Injia, Monbat said during the week. Technical and procedural omissions of the competent authorities of the selfgoverning region Voyvodina were stated as arguments for the suspension. No remarks related to the ecological and technical implementation of the project have been made. Monbat counts on the plant to provide it with cheaper raw materials for the production of starter batteries. The company said that the delay of the project will have no impact on its expected financial performance in 2008 and 2009. It has said it expects its net income to reach BGN16.1 mln in 2008 and BGN 23.5 mln in 2009. Earlier during the week the car battery producer cut the minimum price for buying back its shares to BGN 6.0 from BGN 10.0 previously.
- Orgachim [5ORG] has appointed Achille Bardelli as company CEO and member of the management board, the company said. Bardelli previously worked for Max Mayer, Glidden-Salchi, BASF, Degussa-Inxel, DuPont Powder Coatings and Akzo Nobel. He is replacing Boyko Shoylekov, who acted as company’s interim CEO after Ivan Sokolov resigned.
news of the Week
- The current account deficit of Bulgaria widened to 14% of GDP as of the end of August, surging 42% y-o-y to EUR 4.77 bn. Meanwhile, the trade deficit also increased, to EUR 5.75 with imports rising by 25.4%, faster than exports which increased by 22.4% in the first eight months of the year. Additionally, foreign direct investments (FDI) dropped 28% y-o-y to EUR 2.98 bn as of the end of August and covered 62.5% of the current account gap as compared to 123.7% a year earlier.
- Bulgaria’s year-over-year consumer price inflation decelerated to 11.0% in September compared to 11.2% in August. Consumer prices increased by 7.4% in the first nine months of the year. Gross disposable income of the households increased by 14.8% y-o-y to BGN 685.50 per month. The expenditures of the households rose by a very similar pace, advancing by 14% to BGN 718.78 per month. Bulgaria’s September unemployment rate fell to 5.8% from 5.89% in August and 6.78% a year earlier.
- Bulgaria's Lev Overnight index Average, LEONIA, continued its skywalk in contradiction to the tumbling LIBOR. LEONIA reached a new record high of 6.37% on Friday, from 5.81% a week earlier and 4.49% at the beginning of the year.
BG40 Stocks (table)
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Newsletter Weekly 2008.10.13-17.pdf, 78 Kb
