FEDERATION OF EURO-ASIAN STOCK EXCHANGES > YEARBOOK 2002/2003 > PAGE 28
BULGARIAN STOCK EXCHANGE
LETTER FROM THE CHAIRMAN
In the last twelve months we continued
our policy of diversifying the
instruments traded on the BSE.
The year 2002 was a relatively good year for
the Bulgarian Stock Exchange (BSE). This is
best illustrated by the more than 100%
increase of the official BSE index, SOFIX, on
a year-on-year basis. The overall turnover
and trading volumes remained stable
throughout the year and even registered an
increase.
2002 was the year in which the European
Commission praised the efforts of the
Bulgarian people during the long transition
period and recognized our economy as a
“functioning market economy.” This is a very
important step toward the full integration of
our country into the European Union. The
constantly improving performance of the
Bulgarian economy will undoubtedly have a
positive effect on the development of the
capital market. The current government has
given its support and has taken concrete
measures to transform the stock market
making it more modern and efficient and in
compliance with international and European
standards. An important step in this direction
is the implementation of a large-scale
program for privatization of state-owned
companies through the stock exchange. This
will increase the supply of attractive issues
in the stock market and will also increase
investors’ demand.
In the last twelve months we continued our
policy of diversifying the instruments traded
on the BSE. We now offer a wide variety of
shares, government, corporate, municipal
and mortgage bonds, along with Bulgarian
Depository Receipts, based on foreign stocks
and indices, and some specific Bulgarian
instruments such as compensatory notes.
Our management also continued its efforts
to develop new services for our members.
By the end of 2002 we started testing the
new Client Order-Book Online System
(COBOS), which should be operational in
the first weeks of 2003. Through this
innovation we hope to attract a wider investor
base and facilitate stock market transactions.
On an international level the BSE remains
active in different projects and initiatives
intended to promote regional and pan-
European cooperation. A Memorandum of
Understanding was signed with the Moscow
Interbank Currency Exchange and further
steps were taken to develop relations with
partner exchanges in Southeast Europe – the
Istanbul, Athens, Macedonian, Romanian,
Croatian and Belgrade stock exchanges.
Representatives of these exchanges
participated in an international roundtable
hosted by the BSE, dedicated to the problems
of “Privatization Through the Stock
Exchange.” Our discussions showed that we
have common problems and common goals,
some of which we can reach through
common efforts.
Apostol Apostolov
Chairman
HISTORY AND DEVELOPMENT
The First Bulgarian Stock Exchange (FBSE) was
inaugurated on 8 November 1991 and started
trading in May 1992. In 1996, the newly
established Securities and Stock Exchange
Commission (SSEC) introduced the requirement
that all listed stocks must have their prospectuses
approved by the Commission in order to trade
on the FBSE. As no company was able to comply
with the new SSEC requirements, trading on the
FBSE was suspended on 23 October 1996.
The Bulgarian Stock Exchange-Sofia (BSE) was
licensed as a new entity by the SSEC in October
1997, replacing the FBSE. Operations on the BSE
floor began on 21 October 1997. Due to the
mass privatization process, several million
Bulgarians became small investors, creating a
solid base for the development of a large and
liquid capital market.
On 12 January 1998, the Exchange launched its
official floor, trading shares in the first listed
company - Elkabel. By the end of 1998, there
were 19 companies listed on the Official Market
and 1,000 companies from the Mass Privatization
Program were admitted for trading on the Free
(OTC) Market.
By the end of 2002 the number of listed
companies on the Official Market of the BSE
reached 32. Major industrial companies, banks,
holding groups and investment funds are among
the issuers in this market. Over 300 companies
are still being traded on the Free Market;
amendments to the Law on Public Offerings of
Securities allowed the least traded companies
on the Free Market to close and delist. In the
meantime, new trading instruments were
introduced – government, corporate,
municipality and mortgage bonds, as well as
Bulgarian Depository Receipts.
The Law on Public Offerings of Securities, which
was adopted by the Bulgarian Parliament in
December 1999, replaced the Securities, Stock
Exchanges and Investment Companies Act
(1995). New amendments were added to the
new law in the spring of 2002, which provide for
even greater protection for minority shareholders
and creates further prerequisites for the
development of a transparent and efficient capital
market in the country.
FUTURE OUTLOOK
In 2003 the BSE proposes:
to implement new services to improve the
operational efficiency of the trading infrastructure
and better satisfy the needs of the investment
intermediaries and members of the BSE;
to put forth efforts to attract high-quality issues
while increasing liquidity, as well as trading
volumes;
to develop initiatives promoting cross-border
cooperation among stock exchanges, and
eventually dual listings; and
to develop educational programs while
publicizing stock trading among the general
public.