Late in the afternoon on Thursday (17.25 o'clock) the Bulgarian Stock Exchange (BSE) published its Capital Market Analysis and Strategy for the Development of the Market until 2010. Here are the most important points in the strategy:

XETRA

The implementation of the XETRA trading platform, which is used by the Frankfurt Stock Exchange, is a top priority of BSE in the short term. The trade on BSE through the XETRA platform is expected to start in the middle of 2008.

More than 600 market participants and over 5,000 brokers are connected to the XETRA system. This will inevitably have a positive effect on the local capital market, as it will make the access of foreign investors a lot easier.

COBOS

In view of the changes on the market, related to the new functions performed and the new services offered by BSE and in connection to the growing maintenance costs for the COBOS trading system, solutions will be sought and actions will be taken to secure the unimpeded operation of the system. Various options for the future functioning of the system, including the possibility of being offered to clients (BSE members) under a licensing regime, will be discussed with representatives of the investment intermediaries.

Attracting Issuers

The attracting of issuers will be among BSE's top priorities. In this regard, BSE will continue regularly to analyze the companies, that have the potential to acquire a public status and to maintain a database of potential issuers. The focus will shift towards the preparation of analyses on prospective sectors of the economy (the potential issuers operating in these sectors), as well as on increasing the sector representativeness of the companies listed on BSE.

Another object of analyses and communication will be the equity financing companies and venture capital funds, through which BSE will seek enterprises suitable for listing.

BSE will also be active in its co-operation with representatives of the competent authorities as far the privatization of major monopolies through the stock exchange is concerned. Work groups will be formed and assistance will be provided to consultants in the development of the concepts for privatization and etc.

Attracting foreign issuers for dual listing

Another priority regarding the new issuers is the attracting of foreign companies for dual listing and trade. Bulgaria's EU membership should facilitate BSE in joining the pan-european capital market. The harmonization of the Bulgarian legislation in the field with that of the EU, the introduction of a unified passport and the easing of the notification procedure will make the dual listing of foreign companies on BSE relatively easy.

Encouraging the raising of additional capital by public companies

Efforts should be made towards raising the awareness on the ways companies may increase capital through the stock exchange. In this regard, raising the awareness of the companies' managerial bodies on the actions that can be taken in this direction is of key importance.

A change in the regulations for the trade of the least liquid companies

BSE's efforts in the medium term will be directed towards optimizing the trade in the least liquid companies on the market. Various normative and technical solutions for а change in the regulations for the trade in such stocks will be sought. The solutions in this regard are related to changes in the criteria for the registration of companies on the lowest segment of BSE's Unofficial Market and possibilities for the delisting of the companies for failing to comply with these criteria.

Introduction of new financial instruments

The introduction of new financial instruments on the market is another medium-term goal set by BSE. On one hand BSE will strive to attract issuers of various types of securities, which can be traded depending on the present market infrastructure. On the other hand, partners and/or solutions enabling the organization of processes of clearing and settlement, which will allow trade in derivatives, will also be sought.

Communication and PR strategy

As a continuation of the policy for the popularization of the capital market, BSE plans to optimize its Communication Strategy, which will aim at establishing BSE's leading role in public's perception of the capital market.

In the future BSE will continue to strive for regular presence in the media, including non-specialized media. It will give publicity to the operation of the market, as well as to its advantages and prospects.

All this sounds great, but analysis and statistics filled 31 of the 38 pages released by BSE. The strategy for the following years is limited to just seven pages. A more detailed look on part of the future activities of BSE reveals that it is not exactly clear as to how these priorities will be attained. After all this is a strategy, not a regular new dispatch.