The biggest decliner has been Central Cooperative Bank, whose shares fell 54.48%, followed by Industrial Holding Bulgaria (-52.98%).
This is no surprise since the two companies are the most volatile in the index, according to a study Profit.bg made at the end of January. Industrial Holding Bulgaria's beta coefficient stood at 1.43 in January, and that of the bank was at 1.35.
Five of the index's constituents have lost around 45% since the correction started – Euroins (46.79%), Lead and Zinc Complex (47.46%), Orgachim (47.68%), Chimimport (47.89%) and Toplivo (44.17%).
M+S Hydraulic fell 40.09% and Neochim dipped 41.77%. Next are Sparky Eltos (35.86%), Kaolin (35.84%) and Albena (32.8%).
Bulgarian-American Credit Banks saw the thinnest loss – 15.07%.
So we have financial institutions both at the top and at the bottom of the decliners list. This can be explained with the difference in their P/E ratios. In spite of the correction, CCB's P/E stays at 24.76, while that of BACB is 16.83.
Both banks posted similar earnings growth last year, which may also be the reason for the wide gap between their P/E ratios. CCB's profit rose 70.8% in 2007, while that of BACB went up 55.6%.
The P/E ratio is not the only factor influencing the stock depreciation. Chimimport, for example, has the lowest P/E among the blue chips but the stock has plunged some 47.9% during the period to become the third top decliner.
Chimimport boasted the highest earnings in Bulgaria last year (120.07 mln leva, 61.39 mln euros), which is 86.6% up from 2006.
Elana Agricultural Land Opportunity REIT is the only company, whose stock has actually appreciated during the ongoing correction.
|Company||Price on Oct 15||Price Today||Decline %||Р/E|
|Industrial Holding Bulgaria||15,93||7,49||-52,98%||28,77|
|Lead and Zinc Complex||117,39||61,68||-47,46%||23,52|
|Corporate Commercial bank||106,77||83,77||-21,54%||22,39|