Angel Dikov, Analysis and Markets Manager in Somoni Asset Management
After the sharp and relatively strong correction on BSE in the past couple of weeks, in the past several sessions most issues slowly started to emerge from the low levels over the past month, some of them seem to have recovered almost completely.
The corrections were due to a combination of several factors, which emerged at the same time: the crisis on international markets, the several forthcoming IPOs, SPOs and capital increases, as well as the the sharp comments coming from some financial institutions.
The combined impact of all these, which came after a too long period of advances for the local stock indexes, brought to the sharp slide and loss of trust in Bulgarian companies and most recently in collective schemes as well. This led to massive selling and refraining from buying, even at the corrected and relatively low prices.
However, the past two sessions, indicate that this period is over, and that the trust in the market is starting to rebound, even before the IPOs and SPOs expected in the following 20 days. At a meeting held November 22, Bulgarian financial institutions shook hands and worked out their differences.
The correction sobered up speculators seeking fast cash and risking too much. This will probably make investors more cautious from now on, and they will assess the company fundamentals more thoroughly before investing. If companies post good results in their consolidated reports, which are expected next week, and in case of successes of the upcoming IPOs and SPOs, the market will be able to take the upward path again.
Ivo Tolev, Portfolio manager in Synergon Asset Management
The week will be dominated by the long expected IPO of Enemona JSC. The upward trend on most positions will probably end tomorrow. The fact that most investment intermediaries are requiring proof for the funds in order to make orders, and the concerns for a bubble on the local stock market already took their toll. I expect a temporary consolidation of current levels and a possible transition to another upward trend soon.
Mincho Minchev, chief dealer, Investbank
The mian force setting the trend on the local stock market this week will be foreign investors. The mortgage credit crisis in western economies severely hurt developing markets.
Local investors are expecting the consoliadted reports of companies, which are due by end of November.
December is traditionally a strong month for both Bulgarian and foreign exchanges. Convincing consolidated reports may change the trend on BSE.