FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2009
BULGARIAN STOCK EXCHANGE
Bistra Ilkova
CEO
After having achieved record breaking results
in 2007, the Bulgarian stock market
experienced in 2008 its worst performance for
the last decade. Although there were not any
local fundamental economic reasons for this
decline, the global financial crisis had a
significant impact on Bulgaria. First, major
foreign institutional investors started pulling
out, then many individual investors sold under
panic their shares. All in all, our main index
SOFIX lost in 2008 80% of its value, the
turnover went down by 70% and the market
capitalization of the BSE decreased by 57%.
In spite of the overall unfavorable conditions
on the market, close to a hundred new issues
were registered on the stock exchange.
Among them were 3 IPO’s, 17 secondary
listings, 23 bond issues, 19 increases of
capital, 17 REIT’s and others.
HISTORY AND DEVELOPMENT
The first Stock Exchange Act was adopted in
1907 and regulated the structure and
operations of stock and commodities
exchanges. The Securities, Stock Exchanges
& Investment Intermediaries Act was adopted
in July 1995, which led to a process of stock
exchange consolidation. In July 1997, the
present Bulgarian Stock Exchange-Sofia was
established. In accordance with the
requirements of the new law, a Securities &
Stock Exchange Commission was set up.
On 9 October 1997 the Commission officially
licensed the BSE-Sofia. The first trading
session on the regulated market took place
on 21 October 1997. By the end of 1999 there
were 32 companies listed on the Official
Market and about 1,000 companies admitted
for trading on the Free (OTC) Market as a
result of the mass privatization program. On 6
December 2001 the Commission officially
licensed the BSE-Sofia to organize an
Unofficial Market, which replaced the Free
Market and set clear rules for regulation of all
companies traded on the Exchange.
In December 1999 a new Public Offering of
Securities Act was adopted by the Parliament.
The law is aimed at providing protection for
investors and creating prerequisites for the
development of a transparent capital market
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2009 will be a year of many new challenges,
but we hope that it will also be the year of
the recovery of the stock markets. As in the
past, the BSE will do its best to be a good
and correct partner to all market participants.
Among our major achievements in 2008 was
the connection of the BSE trading system to
the XETRA platform of Deutsche Boerse. This
was a major step in our efforts to modernize
our infrastructure, to increase the liquidity, the
visibility of the Bulgarian market and the
efficiency. We believe that our partnership with
the German bourse operator will have a
beneficial effect on our overall performance.
In 2008 the BSE hosted the international
conference “The Prospects for Capital
Markets in Southeast Europe”, which
gathered in Sofia a great number of capital
markets expert from the region. The
discussions covered all major topics,
regarding the developments of the stock
markets in Southeast Europe and traced new
roads for co-operation among our exchanges.
in Bulgaria with criteria similar to those of the
European Union.
The Securities & Stock Exchange Commission
was first renamed the National Securities
Commission, but in March 2003 it was
replaced by a new supervisory body - the
Financial Supervision Commission (FSC).
More than just a name change, the move
pulled together the regulation of a number of
financial (non-banking) sectors under one
body. The regulatory changes during the year
directly improved conditions for investors and
issuers, as well as underlined the
government’s commitment to encourage
wider overall development of the capital
markets.
FUTURE OUTLOOK
2009 is expected to be the year of the
recovery for the Bulgarian stock market. After
the significant downfall in stock prices, market
capitalization, trading volumes and turnover in
2008, the Bulgarian Stock Exchange sees as
its main task in the coming months the
regaining of the confidence of the investors
–both local and foreign, portfolio and
institutional.
The BSE hopes to achieve this through
continuing road-shows in Bulgaria and
abroad, roundtable discussions and
It is our firm conviction that crises come and
go and that we have to continue
unrelentlessly on the path of dynamic
business development. In our business plan,
which covers the period to 2010, we have
foreseen to continue our efforts to attract the
good performing companies to the stock
exchange and to increase the liquidity on the
market. As soon as the trend starts to go
upwards again, we expect 30-40 new
companies to prepare for listing. We will also
pursue another of our major goals and that is
– to popularize the best performing public
companies among foreign investors, including
through road-shows abroad.
2009 will be a year of many new challenges,
but we hope that it will also be the year of the
recovery of the stock markets. As in the past,
the BSE will do its best to be a good and
correct partner to all market participants.
educational seminars. On the one hand the
idea is to attract more investors and on the
other – to increase the number of new listings.
In case the situation in the financial sector
gets better, it is expected that many of the
postponed IPO’s from 2008 will take place
during 2009.
After having successfully implemented the
new trading system – Deutsche Boerse’s
XETRA platform - the BSE plans to continue
the modernization of the infrastructure and
technological base. New services will be
proposed to the members, mainly in the field
of information disclosure and dissemination.
The new information product “X3 News” that
was offered to the issuers in 2008 was highly
successful. This specialized media developed
by BSE experts ensures that the all corporate
information reaches simultaneously the widest
possible range of users.
The BSE will continue to maintain an active
dialogue with all exchanges in Southeast
Europe, which have experienced a similar
turmoil. The BSE will support FEAS’ efforts to
play a significant role in the exchange of
information and experience among its
members, especially such that is linked to the
overcoming of the effects of the global
financial crisis on the stock markets.