Bulgarian capital market that is pretty slow at the moment is expected to become livelier soon. The management of the Bulgarian Stock Exchange /BSE/ has offered a strategy for its development to the public till 2012 and also for attracting new investors, interested in buying shares from prestigious Bulgarian companies. The goal is the securities trade to be improved in Bulgaria through making the market more accessible and attractive to foreign investors and also new opportunities to be offered to the local ones. According to Mr. Asen Yagodin, Chairman of the Board of the Directors of BSE this is the way of returning the trading capacities on the stock exchange on their levels before the crisis. This all will need a restoring of the trust and the good communication between the stock exchange and the rest of the participants on the capital market. A technological updating of the Central Depository /CD/ will also be necessary. The CD is the institution that registers and stores the entire information for the emissions of stock exchange trade, securities and compensatory instruments, gained during the mass privatization, as well as for the shareholders of the companies. Representatives of the BSE have announced that new forms of exchange trade, unknown in Bulgaria till now, will be presented to the investors. They will include the efforts of making more and more Bulgarian companies follow the basics of good corporate management and become public companies, which will make their shares more expensive, if offered on the stock exchange. The offers of share packets by companies with state participation are also expected to wake the stock exchange trading, attracting interested local and foreign investors. There was such a movement at the exchange a few years ago, when a share packet of the national telecommunication company was offered. Mr. Yagodin adds:
“The energy companies are the most suitable for attracting investors at the moment. The government discusses right now which companies and what parts of them will be presented on the stock exchange. We continue to be optimistic that the government will make its intentions a reality soon. Companies that show good financial results, well presented on the local market and active in exports have their constant position on the stock exchange. This of course includes companies with good corporative management.”
The Bulgarian companies will be stimulated to follow the rules of the good corporate management by their admission into the stock exchange indexes, for instance BG 40 where only the best companies enter. This appears to be some sort of a free advertisement, Mr Yagodin says. He also added that “the more good companies become public with most of their capital traded on the exchange, the faster will be the push of the capital market in Bulgaria”. The so-called Silver Fund, created by the state in order to stabilize its social security system could be a serious investor on the stock exchange. However, the legislation should be changed to achieve that. So far the fund’s capital that is deposed in the Central bank is worth around BGN 1.5 bln. /EUR 800 mln./. Stock exchange experts say that the money from this fund should be invested only when there are enough shares that respond to liquidity, profitability and good corporate management criteria. Representatives of the stock exchange also consider the establishing of special annual awards that will have to stimulate companies to follow the Code for good corporal management.
English version: Zhivko Stanchev
