BULGARIAN ECONOMIC GROWTH SUPRISES INVESTORS

Market Overview (6^th December – 10^th December)

The main Bulgarian index SOFIX decreased by 1.79% this week, down to 613.34 points. The broad index BGBX40 decreased by 0.47% to 139.42 points. BGREIT decreased this trading week to 164.30 points, down by 0.38%.

Corporate News       

Zaharni Zavodi AD (ZHZA) reports a decrease of 5% YoY to BGN 98,469mln in revenue for the first nine months of 2021. The decrease comes from a fall of 22% in the sales of products to BGN 72,327mln. The net profit for the same period has fallen by 35% to BGN 4,5mln. The expenses for materials and external services have fallen but with smaller peace than the profit decline.

First Investment Bank (FIB) announced a program to issue bonds of up to 100m euros. The goal is to be recognized and included in the additional tier 1 capital of the bank. The minimum nominal value of one bond of the issues will be EUR 100,000, including the possibility of an additional investment with a step above this amount of EUR 1,000 or a multiple of EUR 1,000.

Economic News                                                       

The Bulgarian economy advanced 4.6% YoY in Q3 2021, much higher than initial estimates of 0.4%. Final consumption increased by 6.8%, whereas gross fixed capital formation continued to decline (-9.7%). Also, net foreign demand contributed negatively as exports surged 9.8% while imports soared at a faster 12.7%. Industrial production in Bulgaria increased 9.7% YoY in October 2021, the same as the previous month and marking the 8th consecutive month of growth in industrial activity. Output slowed for manufacturing and mining & quarrying but quickened for electricity, gas, steam, and air conditioning supply. Construction output in Bulgaria decreased 1.9% in October. Retail sales in Bulgaria advanced 7.6% YoY in October 2021. Sales rose for both for food, beverages & tobacco (7.6%) and non-food products (7.4%).

Active COVID-19 cases in Bulgaria are on a decreasing trend with a 7-day MA of 1,674 cases. The active cases at the end of the week were 97,575. The total number of fully vaccinated people so far is 1,839mln, which is 26.5% of the population in Bulgaria.

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