Bulgarian Capital Markets at a Glance - BSE-Sofiadownload.bse-sofia.bg/presentation/1.3. Bulgarian...
Transcript of Bulgarian Capital Markets at a Glance - BSE-Sofiadownload.bse-sofia.bg/presentation/1.3. Bulgarian...
Bulgarian Capital Markets at a Glance
Ivan Takev, CEO, BSE
London, May 18th 2017
Disclaimer
The materials, contents, and references may not be used for and shall not be deemed to be apublic offering of securities in the United Kingdom. These materials do not constitute anoffer of Instruments to the public in the United Kingdom.
These documents do not constitute advertisement, neither a prospectus for the purposes ofDirective 2003/71/EC. Investors should not subscribe for any securities referred to in thesedocuments.
This presentation is set forth for informational purposes only. By attending all viewersacknowledge that (i) the presentation of this material neither constitutes an offer to sell nora solicitation of an offer to buy the financial instruments described, (ii) no recommendation ismade concerning the financial instruments described and (iii) it may be unlawful to offer tosell or to solicit an offer to buy the described financial instruments in certain jurisdictions.
The opinions expressed represent personal opinion of the author only.
The author may possess investments in some of the financial instruments analyzed andcommented.
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2000
20042005
2008Bulgarian Stock
Exchange
Bulgarian Central
Depository
SEC License
SOFIX
First IPO
BG 40
2010
‘BSO’
2011
New Market Segmentation
2012
CGIX
1995
19961997
2013
2016
Premium Market
‘BGX’
Milestones
3
Infrastructure overview
XETRA®
Market
Commonly adopted trading model
Robust functionalities
Large capacityHigh-
speed operation
Easy remote access
MiFID II ready
4
Macro Highlights2013 2014 2015 2016
GDP (EUR million) 41 911 42 750 44 162 47 364
Real GDP growth 1.30% 1.60% 3.00% 3.40%
Short-term interest rates 1.14% 0.79% 0.54% 0.15%
BGN/EUR exchange rate* 1.95583 1.95583 1.95583 1.95583
Population 7 265 115 7 223 937 7 265 115 n.d.
GDP per capita (nominal, EUR) 5 765 5 911 6 136 6 645
Market Cap (EUR million) 5 093 4 988 4 390 4 951
Market Cap/GDP 12.15% 11.67% 9.94% 10.54%
Source: BNB* Pegged to DEM (hence to EUR) since 1999
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Macro Highlights
Source: BNB* Pegged to DEM (hence to EUR) since 1999
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
5
10
15
20
25
30
35
40
45
50
EU
R (b
illio
n)
Market Cap/GDP
Mcap GDP Mcap/GDP6
Market Highlights (1)2013 2014 2015 2016
Trading value (EUR million) 792 388 210 213
Capital raised (EUR million) 58.60 15.62 16.53 23.33
Companies raised capital 11 5 5 7
Average capital raised per company (EUR million)
5.33 3.12 3.31 3.33
IPOs 1 1 1 2
0
2
4
6
8
10
12
14
16
18
20
22
200
250
300
350
400
450
500
550
600
650
700
SOFIX performanceJan 2010-May 2017
SOFIX value P/E P/B
0
4
8
12
16
20
24
390
440
490
540
590
640
690SOFIX performance
Last 365 days
SOFIX value P/E P/B 7
Market Highlights (2)
0
500
1 000
1 500
2 000
2 500
0
3
6
9
12
15
USD
(b
illio
n)
FDI vs. SOFIX performance
FDI SOFIX
Source: The World Bank, BSE 8
Market Highlights (3)
Source: The World Bank, BSE
0%
5%
10%
15%
20%
25%
30%Turnover Velocity (Main Market vs. SOFIX constituents)
BSE Turnover Velocity SOFIX Turnover Velocity
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Market Highlights (4)
10
0
50
100
150
200
250
300
350
0
2
4
6
8
10
12
14
16
Avg
Mo
nth
ly T
rad
ed V
alu
e (E
UR
Mill
ion
)
Mar
ket
Cap
(EU
R b
illio
n)
Main Market Cap (eqities only) and Monthly Traded Value
Average Monthly Traded Value Market Cap
Market Highlights (5)
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0
20
40
60
80
100
120
140
160
EU
R (m
illio
n)
Monthly Traded Value vs. 12-month Median Monthly Traded Value
Monthly Traded Value
12-month median Monthly Ttraded Value
Market Highlights (6)
Source: BSE
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
Potential median spread after two-sided execution of EUR 10,000
Sopharma Advance Terrafund Chimimport
12
Market Highlights (7)
Asset Management Companies 31
Net Assets Under Managements (AuM) of mutual funds (EUR million) 532
Net Assets Under Managements (AuM) of pension funds (EUR million) 5 552
Market Cap held by institutional investors (EUR million)996
Share ownership by institutional investors 17.86%
Share ownership in SOFIX Companies by institutional investors 6.11%
Share ownership in BGBX40 Companies by institutional investors 9.00%
Institutional investors include investment funds, UCITs, Pension insurance companieshttp://www.fsc.bg/, http://baud.bg
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Market Highlights (8)
0
100
200
300
400
500
600
90
95
100
105
110
115
12-2010 12-2011 12-2012 12-2013 12-2014 12-2015 12-2016
EU
R (m
illio
n)Investment Funds AuM
Bulgarian Investment funds total assets under management (EUR)
Total number of investment funds 14
Corporate Governance
2011
2012First corporate governance code
National Corporate Governance Committee
National Corporate Governance Code
CGIX
Parallel Englishdisclosure
20062007
2009
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Corporate Governance (2)
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-
500
1 000
1 500
2 000
2 500
2011 2012 2013 2014 2015 2016
EU
R (m
illio
n)
Total operating income /SOFIX and CGIX constituents/
CGIX Constituents SOFIX Constituents
Why invest in Bulgaria
0.93%
4.06%
1.49%1.40%
1.87% 1.84%
1.18%
3.96%
3.04%
2.01%
1.50%
2.25%
5.97%
5.58%
4.93%
3.54%
2.31%
1.15%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
2011 2012 2013 2014 2015 2016
Dividend yield and interest rates comparison
average dividend yield all listed companies average dividend yield SOFIX average interest rate on 6 m to 1y deposits 17
Why invest in Bulgaria
• 0% tax on capital gains;
• 5% dividend withholding tax;
• 10% flat corporate & personal income tax
0%
10%
20%
30%
40%
50%
Bulgaria Romania Poland Austria Germany UK
Natural Person Capital Gains Taxation
0%
10%
20%
30%
40%
50%
Bulgaria Romania Poland Austria Germany UK
Natural Person Dividends Taxation
0%
10%
20%
30%
Bulgaria Romania Poland Austria Germany UK
Legal Person Capital Gains Taxation
0%
5%
10%
15%
20%
25%
30%
Bulgaria Romania Poland Austria Germany UK
Corporate Income Taxation
0%
5%
10%
15%
20%
25%
30%
Bulgaria Romania Poland Austria Germany UK
Legal Person Dividend Taxation
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Why invest in Bulgaria
Note: BSE charges per executed order regardless of the number of executions it may trigger.19
0
5
10
15
20
25
MontenegroSE
Bucharest SE BSE-Sofia Ljubljana SE Zagreb SE Belgrade SE Banja LukaSE
MacedonianSE
Trading fees (bps)
Purchase Sale
Why invest in BulgariaIndex
Last 52w performance
SOFIX 48.51%
WIG 29.39%
ATX 29.22%
BET 27.64%
MBI10 24.50%
DAX 23.90%
BUX 22.64%
CAC 40 18.93%
RTS 17.17%
BELEX15 16.69%
FTSE 100 15.41%
CROBEX 12.64%
ISE 100 10.93%
SMI 10.70%
PX Index 10.02%
SASX-10 -11.72%
-40%
0%
40%
80%
120%
160%
200%Local Indices Performance
BGREIT SOFIX BGTR30
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In the pipeline
Order routing platform
Five exchanges connected
Four more to join
FIX 4.4 implementation
Expected launch Q4 2017
Full domestic debt coverage
Stepping stone for other instruments
SME Private market
SME Growth Market
Crowdfunding Platform
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Government Debt Market
Focus onSMEs
But still….why?
Attractive Valuations
Efficient infrastructure
FavourableTaxation
Opportunities
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Thank you!