Bulgaria: International Investors Interested in Bourse Debut

The building of the Bulgarian Stock Exchange in Sofia. Photo by Sofia Photo Agency

International investors have shown interest even before Bulgaria's stock exchange launched the sale of shares Thursday morning, the bourse's executive director said.

A few months ago Ivan Takev admitted that the increase of the Bulgarian government's share in the country's only stock exchange will lead to the sale of its majority stake to an industry investor.

"A technology provider doesn't necessarily have to be the strategic investor, but it is a certain advantage," Takev said in an interview for Bloomberg agency.

"We are working to boost liquidity, which was slashed in the past three years, to restore market growth and investor confidence. I hope in some three to four years we'll achieve this."

Bulgaria's only stock exchange became a public company in the middle of December after the Financial Supervision Commission approved its prospectus and the bourse was listed on its own platform. The capital of the bourse is a total of BGN 6 582 860 at BGN 1 apiece.

Bulgaria's Finance Ministry raised at the beginning of October its share to 50% plus one share from 44% in the country's stock exchange. The government bought 715,000 shares at BN 1 apiece. The bourse will sell the remaining 50% held by private investors including brokerages and banks.

The shareholders said the move aims to ease the future privatisation of the exchange and the search for a strategic investor.

Since 2008, the stock exchange has traded on the Deutsche Boerse's Xetra platform under a contract that expires in 2012. Bulgaria has discussed ways to sell its bourse stake over the past decade with Sweden's OMX AG and exchanges in Austria, Greece and Poland to boost interest in local stocks and make trading more transparent.

Representatives of the Finance Ministry and the Stock Exchange have commented that the move will give the ministry the opportunity to seek a strategic investor, make the Exchange transparent, increase interest towards the capital market and reinstate the trust in the latter.

Meanwhile Victor Papazov, founder, former CEO and chairman of the Bulgarian Stock Exchange has harshly criticized the decision, saying the Bulgarian government is threatening the country's economic future by effectively nationalizing its stock exchange at a knock-down price.

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