The Bulgarian market celebrated the clear victory of pro-European Gueorgui Parvanov, in the second round of the presidential elections with ultranationalist Volen Sidérov a small increase. In the wake of the re-election of the head of State, widely anticipated by the polls, the Sofix index advanced by 0.59, to 1.090,48 points, registering above historic new.
"The market had already integrated the result of this vote, explains Thomas Saulnier, manager specialized in Europe from the East at Lombard Odier Darier Hentsch (LODH)." "Investors welcome the defeat of the extreme right and the continuation of the process for the Bulgaria entry in the European Union in January 2007". The Sofix had already won 2.50 last week, recording a gain of some 13 since the beginning of the month, and especially a bond of 32 since the beginning of the year 2006.
A fairly defensive index
The progress of yesterday is only a step in the almost uninterrupted rise since May (1). According to data of East Capital and the Bulgarian Stock Exchange, market capitalization has recorded an increase of 18 in the first half of 2006, to $ 7.3 billion. Transactions (in value) were increased by 30 over the same period.
The place has several encouraging factors. First on the macroeconomic: the rate of inflation should exceed 7 in 2006 and the current account deficit represents approximately 13 of GDP but growth remains high (approximately 5 in 2006), "supported by strong domestic demand under the effect of the increase in wages and the boom of the credits, indicates Armelle Laborderie, Economist at Credit Agricole.". Especially, the Bulgaria shows a willingness to avoid overheating and continued major reforms for the development of the market economy, as a lowering of rates of taxation and privatization. "Finally, the spreads calculated between of us state and the Bulgarian obligations remain low compared to other countries of the (non-integrated EU) Eastern Europe, which reflected a lower risk premium".
Unlike most of its emerging counterparts, the Bulgarian place has not had a hole-in-air important last spring (only 2.19 in May). The profile focused and relatively defensive flagship index, which includes only 12 values, probably explains it. According to data of East Capital, rating includes 28 of pharmaceutical values and 22 of financial.
Then, "domestic investors are more dominant compared to other awards in the area and have a longer term vision." "The lack of liquidity with a floating of 18 on average from East Capital, Editor's note can become a disincentive for foreign investors," resumes Thomas Saulnier.
But it is above all, in his view, the will of the Bulgaria to enter the "eurozone by 2010, to reduce the risk of change, which is an important catalyst." Many countries see their changeover to the single currency delay. "For the Romania, who will also join the EU in January 2007, for example, the date of adoption of the euro is still uncertain." A factor which should explain, in his view, a less good holding of the place of Bucharest in the coming months. The Romanian index, the BET, rose by 26 since the beginning of the year.
The modern worker in many cases must be mobileThe second has lost more than 60 since the beginning of JanuaryEven in Waterloo Ontario can win victoriesWhat to allow the French to restore the currentWith these liquidity Rio Tinto has paid 2We will lose 300 million euros of revenues800 billion today approximately 13 of GDPIn 2009 he is expected to reach 44 or 30You have surely passed its image recentlyFrom 175 euro for 1 November to 28 December
