The indexes of the Bulgarian Stock Exchange (BSE) slipped yesterday to fresh lows in the last few years. The positive thing, if there could be something positive about the slump at all, is the low trading volume at which the market is declining.

BSE's trading turnover came to a mere 2.98 mln leva yesterday, which is considerably lower compared to the traditional figures.

We could say that the slump on BSE is related to a large extent to what is happening on the other mature and emerging markets.

The SOFIX blue-chip index slipped by 2% yesterday similarly to the mature European markets, while many emerging markets saw a considerably bigger decline.

Some investors believe that Bulgarian stocks are cheap compared to the other regional markets and this will save us, but this turns out to be far from the truth, if we compare the P/E ratio of the regional markets.

CountryIndexР/EBulgariaSOFIX12,83RomaniaВЕТ9,95RussiaMICEX6,67SerbiaBELEX1514,78TurkeyISE8,38UkrainePFTS11,16

*Data by Karoll

The table shows that except for the Serbian index, Bulgaria's SOFIX has the highest P/E ratio. It is even higher than that of Romania's BET index, which stands at 9.95.

The low ratio of the Romanian index, however, and the fast economy growth in the last quarter could not prevent a 3-percent drop of the ВЕТ index yesterday.

Ukraine's PFTS slumped even more closing 4.6% down. PFTS' P/E rati is also lower compared to SOFIX's.

Ukraine's index continues to be the worst performer in the region with an over 60-percent loss this year.

Turkey's main index lost 4.8% yesterday. The ISE index has the second lowest P/E ratio of 8.38 among the regional indexes.

It is obvious that the foreign investors are fleeing the emerging markets without taking into consideration their fundamentals. This may lead us to believe that the local market may not be the first one on investors' list when they start making their comeback.