The annual non-consolidated reports of companies listed on BSE are due at the end of January, with the consolidated results following in February.

2007 is likely to be a record period for the largest companies, which according to analysts, will post significantly higher profits than in previous years.

Despite that, the recent slides on the stock exchange have wiped out some 30-50% off stock prices.

Just three months ago, some were saying that BSE was overrated, citing three-digit P/E ratios, but after the recent events they may reevaluate their position.

The projected results of the leading Bulgarian companies (if confirmed) will bring the P/E ratios down and closer to those on the developed markets (on 31 Dec 2007 Dow Jones's P/E was 15.71)

The first SOFIX company to announce annual financial results is Bulgarian-American Credit Bank, which reported profit in the amount of 51.1 mln leva (26.127 mln euros). Taking into account the average stock price yesterday (62.67 leva) this puts its ratio at 15.48.

The largest holding in Bulgaria – Chimimport expects profit to some to 0.80-1.00 leva/share at a price of 10-11 leva/share.

Monbat projects 2007 profit at 17 mln leva (8.691 mln euros), the company's market capitalization currently stands at 462 mln leva (236.216 mln euros). The P/E here is a bit higher (around 27) but the company expects next year's profit to stand at 32 mln leva (16.361 mln euros), which is a forward P/E of 14.4.

If we look at other SOFIX companies – Kaolin has had a ratio of about 18 during the past 12 months and analysts expect the annual report to bring it further down.

In spite of the not very convincing Jan – Sept results, Toplivo's management projects 2007 profit at 10 mln leva (5.112 mln euros). The fuel distributor is currently valued at 120 mln leva (61.355 mln euros).

We are not going to list each of the SOFIX companies here but we have to mention that the index's P/E currently shown on the web site of BSE is 20.22, and the annual reports will probably push it to levels closer to the ones of indexes on the developed markets.

We must also take into account the significant devaluation of money during the past year. We saw the prices of petrol, gold, foods and many raw materials hit record levels.

Inflation across the globe had its impact on stocks. That is why many experts are talking about a slide in the value of assets (securities and properties) not in face value, but in real value terms.

So, it would be interesting to see if those who were making the comments about BSE a few months ago still have the same opinion.