What Assets May Be Traded on BSE?

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The most popular instruments traded on the Bulgarian Stock Exchange undoubtedly are the stocks issued by the public companies. It is only logical to be that way as the stocks are the most liquid instruments listed for trade on BSE at present.

Nevertheless, there is a variety of assets offered by the Bulgarian Stock Exchange under to is present level of development.

The list of investment instruments also includes units in collective investment schemes, bonds, compensatory instruments, secondary trade in rights issued as part of capital increase operations. Each of these instruments is traded on a separate segment on BSE. The market also offers the possibility for trust management of assets.

Public companies operating in the manufacturing, mining, services, financial brokerage, constriction and real estate sectors are among the issuers of stock listed for trade on BSE.

The fund industry has been picking up pace in the last couple of years. There are a total of 25 asset management companies in Bulgaria, data of the Bulgarian Association of Asset Management Companies (BAAMC) show. The number of mutual funds and investment companies stands at 74. There are also asset management companies that are not members of the organization.

The risk profile of the collective investment schemes varies from conservative, through balanced to high. This variety also offers a number of opportunities for personal investments.

There are funds investing on the money markets, as well as in fixed-return assets, stocks of Bulgarian or foreign companies, sectors or take part only in IPOs, both domestically and abroad. The first fund of funds in Bulgaria was also established not long ago. Foreign mutual funds also operate in the market and sell units in Bulgaria.

As far as the secondary trade in units of mutual funds is concerned, the market is still underdeveloped and not all mutual funds have listed their units on BSE. The units, however, are also among the liquid instruments as their purchase or sale is not determined by the market but by investors personal desire to enter or exit the collective investment scheme.

The bonds are another instrument traded on BSE. The profile of the companies that have floated bonds on BSE also varies. This instrument has been is gaining popularity lately.

In addition to the underdeveloped secondary market, another disadvantage of the bonds is their private placement and the poorly organized market for their initial public offering. These are the main reasons for the low liquidity of the bonds.

The capital increase of companies that are already listed on BSE is carried out through the issuing of rights and the secondary trade in these rights. Such transactions are sealed on a special marker for rights on BSE.

The compensatory instruments are another asset traded on BSE. The deals in such instruments are also sealed on a special segment of the market. The trading activity in these instruments is very high.

These assets are currently traded under their par value of 1 lev. Unlike the profit from trade in the other instruments, the profit from deals in compensatory instruments is levied a tax.

Individual investors may also opt for asset trust management. The volume of the investment usually should exceed 50,000 leva.

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