Curbs on Arable Land Deals Hit Bulgarian Stock Market TurnoverBusiness | March 9, 2015, Monday // 21:09| views
File photo. BGNES
Total turnover on the Bulgarian stock market has slumped by more than 75% month-on-month in February after Parliament curbed land purchases by non-EU companies and individuals.
“Investors were cautious and the overall investment environment remains unpredictable because of the continuing practice of taking abrupt and controversial political decisions on major topics concerning the capital market,” the Bulgarian Stock Exchange-Sofia said in a statement on Monday
Under amendments to the Agricultural Land Ownership and Use Act adopted by Parliament last month and due to go into force from 1 May 2015, legal entities and individuals based outside the EU, as well as offshore companies, are banned from directly or indirectly purchasing farmland in Bulgaria. The amendments also introduced fines of BGN 100 per decare for a first-time offence and BGN 300 per decare for a repeat offence.
BSE CEO Ivan Takev warned at the time the changes would affect around 15 big companies controlling over 500,000 decares of land and a market value of over a fifth of the capitalisation of the BSE-Sofia, including agriculture land funds and firms in the sectors of agriculture, cosmetics, chemical industry, pharmacy and real estate.
The amendments drew strong criticism from investment professionals and associations, the statement said.
BSE’s main index SOFIX shed 2.54% of its value, reaching 487.79 points at the end of February, while the equally weighted BG TR30 edged up by a meager 0.57%, reaching 397.97 points, the stock exchange said.
The total capitalization of the BSE’s Main Market remained little changed at EUR 3.69 B, down 0.33% month-on-month basis.
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