“The issue of the first exchange-traded fund (ETF), based on SOFIX, marked a momentous week for the Bulgarian capital market” said managing partner at Capital Mane Ilian Scarlatov at the Boom & Bust interview for Bloomberg TV Bulgaria.

According to him, there are serious fundamentals behind the rise of the Bulgarian Stock Exchange (BSE). "I first saw a very good integration between the Ministry of Finance, the Financial Supervision Commission, the Bulgarian Stock Exchange and the Central Depository," said the expert.

"If everybody has the same goal, it will result in a capital market that will serve the best possible economic objectives of Bulgaria, and it will support market development and activity of investors," he added.

The presence of foreign investors in the Bulgarian capital market is currently only about 6%, and the ratio of market capitalization of BSE to GDP is around 10%, pointed out Scarlatov.

"I expect that a more dynamic capital market, will result in a more active primary market," he commented on the situation regarding initial public offerings (IPOs) in Bulgaria.

In 2017 there will in fact be a second ETF, based on SEE Link - SEE index LinX. According to him, there will be another ETF. "These are two very strong catalyst for a small market like the Bulgarian one. The last thing that will encourage the rise of the capital market in Bulgaria even more, is the anticipated start of trading of government securities in 2017," added Scarlatov.

 

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