BULGARIAN STOCK EXCHANGE
The capital market in Bulgaria continued its
dynamic development in 2003. The Bulgarian
Stock Exchange (BSE) index, SOFIX, reached a
record high of 454 points or a 150% increase
on an annual basis.
George Draychev
Chief Executive Officer
The Exchange has been
recognized by
government authorities
as an efficient and
excellent performing
privatization instrument,
guaranteeing
transparency, equal
access and opportunities
for all parties involved, as
well as providing fair
market prices.
The positive attitude of the current government
toward the development of the capital market
has had a very beneficial influence on this
sector as a whole. Without their active support,
the achievements that the stock market has
had today would not have been realized. In
addition, the stable macro-economic
environment since 2001 has undoubtedly
contributed to the 4-time increase in SOFIX
over the past two years.
The variety of financial instruments that the BSE
offers has also expanded in recent years. Along
with the equity market, we have also developed
the bond market. Corporate, government,
municipal and mortgage backed bonds have
been issued since 2000.
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.
Today the BSE continues to play an important
role in the economic reforms in Bulgaria.
Similar to other countries in economic
transition, the development of the Bulgarian
capital market remains closely linked to the
ongoing privatization process. The Exchange
has been recognized, by government
authorities, as an efficient and excellent
performing privatization instrument,
guaranteeing transparency, equal access and
opportunities for all parties involved, as well as
providing fair market prices.
For 2004 we are planning certain technological
innovations, which will be in the best interest of
all participants in our capital market. We will
also start preparations for the launching of a
derivatives market, as well as a special market
for small capital companies and start-ups.
The BSE puts a lot of effort into the
improvement of services for its members, and
in this respect we are very proud of our home-
produced Client Order-Book Online System
(COBOS) launched in March 2003. Another
project that the Exchange is working on is the
implementation of a system for continuous
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.
electronic disclosure of information, which will
also go through mobile phone SMS messages,
to facilitate transparency for issuers as well as
investors.
FUTURE OUTLOOK
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.
Generally speaking, the market performance of
the Exchange since 1997 has achieved a
steady upward trend, a reflection of the growth
of the Bulgarian economy. In comparison to
2002, turnover increased by 38% and share
volume went up by 120%. Market capitalization
increased by 143%.
Since 1 January 2003 International Accounting
Standards (IAS) have been applied in the
banking and non-banking financial institutions,
public and investment companies – a very
positive step for foreign investors.
The BSE has a solid base to continue its
dynamic development in 2004, partly due to the
positive trends in the Bulgarian economy in the
last years. The most important goal that has
been set for next year is the development of an
electronic information disclosure and
dissemination system, which will guarantee all
investors access to price sensitive information
in the timeliest manner.
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 in
Bulgaria with criteria similar to those of the
European Union.
FEDERATION OF EURO-ASIAN STOCK EXCHANGES YEARBOOK 2003/2004
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