The week kicked off with some surprising gains on BSE. Brokers told Profit.bg that the most active buyers right now are the pension funds.
This is why we talked to experts from the three leading pension funds in the country. Here are some interesting facts first:
At the end of 2007 Bulgarian pension funds controlled assets worth a total of 2.328 bln leva (1.19 bln euros), versus 1.522 bln leva (788 mln euros) at the end of 2006.
The largest investors on the Bulgarian Stock Exchange in recent years have been pension funds, foreign investors and mutual funds.
Who is who:
At the end of 2007 Bulgarian pension funds held a total of 664.224 mln leva (339.6 mln euros) in equity. Their available cash stood at 45.6 mln leva (23.31 mln euros) and their bank deposits amounted to 361.8 mln leva (184 mln euros), according to data released by the Financial Supervision Commission (FSC).
As of 30 September 2007, foreign investors control a total of 24.13% of the market value of the Bulgarian public companies, the FSC data also shows. At the end of Q2 foreigners owned 37.07% of the companies.
Milen Markov, pension fund Saglasie, executive director and chair of the Board of Directors
“We are watching certain positions. We are buying and structuring our portfolio rather than selling right now. The stock prices are very attractive at the moment. Of course, I am speaking from the point of view of the fund - investors have to make their own decisions.
The sellers at the moment are those who are afraid of further losses, but in my opinion, there won't be such. I remain an optimist. I don't think the US crisis will have a strong impact on companies and banks in Bulgaria. Even if exports decrease that will not be comparable to stock price changes.”
Miroslav Marinov, finance director, Doverie pension fund
The only thing that is certain about the stock market right now is that it is unstable. The stability is only short term and is dependent upon external factors.
External factors can be viewed in two aspects. First – from the point of view of foreign investors, which are pressured by the financial crisis in the West. Second – from the point of view of Bulgarian investors, which are influenced by the negative news coming from abroad.
I don't think a US recession may have an impact on the financial results of Bulgarian companies. There are factors determining the correlation between the Bulgarian stock market and the intentional bourses but they are more psychological than fundamental.
Factors in the short-term perspective are - the measures taken by central banks (for example FED's attempts toward financial stability in the US) and the financial results released by international banks (news on write-downs especially). On the other hand, we are expecting the Q1 reports of local companies.
Right now the market is meeting the positive news without excitement, while bad news is absorbed immediately. I expect this tendency to prevail for a few months.
The National Revenue Agency is to announce data on tax revenue from the newly introduced tax contributions as well as statistics about the labor market. I expect the new measures will have a positive effect and will contribute to the stability of the financial macroenvironment.
In the long term perspective, we think that sooner or later the turbulence on the stock market will be over and that will happen with the help from big central banks. The effect, however, will not be felt immediately.
All said here of course, is from the point of view of Doverie pension fund.
Boris Bonkin, investment manager, Allianz Bulgaria pension fund
The main problem of the local market right now is the low liquidity. Foreign investors are another factor. During difficult times for the global markets they withdraw funds form the developing ones, because of the high volatility of indexes.
At the moment there are companies with very attractive fundamentals, but there are also many overvalued issues.
Our investment strategy is long-term oriented. That's why market fluctuations are generally not a bad period for us, as we can buy stock we think is undervalued.