Fluxes and Refluxes

: Fluxes and Refluxes
: Bulgaria-news Bulgarian Stock Exchange

Bulgarian Stock Exchanges week passed under the sigh on sharp mood changes

Radoslav Peev | 26.01.2009 19:33
“The damages of a bad news can never be fixed by just one god news.” This American proverb is painfully familiar to capital markets investors. And when bad news seem to be pouring down, the good are mostly unfelt. This was more or less the style of another hard week for the world’s financial markets. This inevitably affected trading in Bulgaria too.
At volumes of some BGN 5 million a day at the average,
the most representative index SOFIX fell
to new record lows. After four sessions of fall and only one of growth, the index lost 6% of its market capitalization and closed the week at 307.42 point, the lowest level since summer 2003. The situation wasn’t better for the other index of investors’ interest BG40. It lost a massive 4.93% reaching 95.9 points.
Special investment purpose vehicles attracted significant interest during the week. Although the index covering their performance BGREIT, lost 1.31% to 44.28, several investors decided to bet against the market and buy, especially on Wednesday. More than 5.2% of Elana Agricultural Lands Fund’s capital changed hands, and large packs of Bulland Investments and Advance Terrafund were traded at higher than the market prices but by the end-week the stock returned to starting position.
The gas crisis end
brought the longed for stabilization of the industry in the country. The leading public companies in the sector were quick to up market values and added some percentage to their stock prices. Yet this news would not restore the companies’ losses reported while they were out of gas. So their shares closed the week in the red. Caolin, for instance, lost over 8.8% to BGN 2.77 a share. Yet not everyone managed overcoming the negative impact of the gas supplies cut. The future of metallurgic plant Lead-Zink Complex gets increasingly blurred after the BTA reported that Kardzhali’s municipal councilors have unanimously decided today to stop the company’s lead production. The reason for this is the systematic pollution of the city atmosphere air. Now investors’ eyes are all fixed to the expected financial report for the last quarter of 2008.
Unlike industry
the banking sector was not that influenced
by the gas crisis. So the direction of public banks’ stocks was mostly determined by the financial reports published during the week. Most all companies reported notable results mostly expressed in incomes and profit growth. One of the best results still with no price change in the week was posted by Corporate Commercial Bank. The reason for the lack of a strong growth despite the good figures in the report is probably the Others section from where a large portion of the bank’s incomes come. Just over 500 transactions managed sending First Investment Bank among the most losing companies and not in the sector only. The company lost over 22.2% to BGN 1.4 a share.
Despite getting increasingly unusable, compensatory instruments are still traded now and then on the stock exchange floor. The major reason for the sharp increase of interest are usually some public orderings which may be paid through compensatories.
Next week’s trade will continue being determined by the latest financial reports expected to be published by the end of month.

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