Brokers: The Market is Ignoring the Good News and Overexposing the Bad News

Brokers: The Market is Ignoring the Good News and Overexposing the Bad News asked three market participants to share their expectations for the development of events on BSE over the following fie dqays. Here is what they told us:

Borislav Nikov, chairman of Status Capital board of directors

The most important events this week will be the releases of public companies' H1reports. It is too early to make predicaments about the trend.

Some companies are improving their results compared to last year and others are reporting worse figures, but as a whole we can see a tendency for deterioration. Expectations are not very optimistic, especially in view of the international financial crisis and the high inflation in the country.

I do not expect that the H1 reports will have a significant impact on stock prices, which are currently much more dependent on political, macroeconomic and, to a certain extent, international factors.

The low turnovers and the lack of any apparent trend are signs we ca expect a calm week on BSE.

Daniel Dimitrov, portfolio manager, Real Finance Asset Management

The deadline for releasing financial reports for 2008 half one is this week. The correction on the local market is getting worse, on the background of the decline on international markets.

Trade in the past weeks was in thin volumes and in this situation, the financial reports will be of great importance to investors.

We are currently witnessing a tendency among investors to not notice the good news and to pay too much attention to the bad news. The first half of 2008 is an important period as for the first time companies started to feel the pressure of the rising prices of fuels, raw materials and labor.

Those companies which managed to improve their result in spite of the unfavorable conditions will have an important advantage before their competition and their stock prices will be rising in the near future. In the short term, good news can only stop investors from sell-offs on certain positions.

Angel Dikov, Analyses and Markets director, Somoni Asset Management

We didn't see any significant changes for BSE indexes last week, trade was consolidated in a thin range of between 1021- 1035 points for SOFIX. It is not clear yet whether SOFIX hit a mid-term low last week, or whether it was just a short-term low and the index will continue the plunge that has been continuing for nine months now.

Each slight rise last week lead to sell-offs on the most liquid positions. It is also obvious that the market needs a fresh inflow of capital.

Both local and international news are mainly negative and bring uncertainty to the market. The lethargy that established itself on BSE will probably not disappear soon. I will not be surprised to see further declines as some large investors are exiting positions.

I do not expect significant slides for indexes though, unless another negative trend sweeps the international markets.

Companies have started to release their Q2 reports, most of which are good so far, but the market seems to be indifferent to good news.

This article expresses the personal opinions of the people quoted and is not a recommendation for buying/selling stock.

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