BSE posted its report last week, revealing a three-fold hike in profits to 5.25 million leva (2.68 mln euros).

If you look at the institution's balance sheet, you see that as at 31 December 2007, term deposits in banks amounted to 3.756 mln leva (1.9 mln euros), while cash and cash equivalents totaled another 5.181 million leva (2.64 mln euros).

The other monopoly institution on our capital market – Central Depository has not yet released its report. In 2006 profit stood at 479,000 leva and cash amounted to 4.16 million leva. The interesting thing is that payroll accounts for the largest part of costs for both institutions.

The rising turnovers and transaction volumes on the Bulgarian Stock Exchange have boosted the revenues of both BSE and CD.

BSE's turnover was up from 3.38 bln leva (1.7 bln euros) in 2006 to 9.95 bln leva (5 bln euros) last year. The number of transactions went up from 213,600 to 490,550 respectively.

The last time the stock exchange lowered its commission fees was in 2005 (from 0.12% to 0.10%).

Central Depository charges 0.5 leva for each transaction, even for one Himko share (which costs 0.11 leva) plus both sides have to pay. Central Depository is collecting fees from all registered companies . If you need more information on the charges you may check their fee list which consists of 65 articles.

The main shareholder in both BSE and Central Depository is the Bulgarian government. The problem (besides being state institutions) is that they are both monopoly institutions and do not abide by the market rules.

If you look at investment intermediaries, where competition does exist, you will see they have reduced their commissions significantly in the past years (although many traders think they can be cut further). The average commission that the bigger brokerages charge is 0.3% (compared with 1% a few years ago).

So the individual investor has to pay around 0.5% for a transaction, while in the developed countries, this percentage is around 0.1%.

Upon signing the agreement with Deutche Borse, BSE announced that the commission fees will not go up?! Unfortunately the financial parameters of the deal on the Xtera platform were not disclosed to the public. This is no surprise here – the same was the case with important deals such as those for the Trakia highway, the South Stream project etc.

Investment intermediaries will probably lower the commission fees amid the intense competition in the sector and the larger turnovers and transaction volumes, but it is not clear whether the monopolies BSE and Central Depository will also do so.