What made Jim Rodgers interested in investing in Bulgaria? (22.01.2013)
“I am planning to invest in Bulgaria” said Jim Rodgers, Chairman of Rogers Holdings and Beeland Interests in a Gold Radio Café interview on the 17th of January 2012.
Rodgers added that Bulgaria seems to be the only country which shows potential among the Balkans.
The question is how Rodgers came to that conclusion?
According to Investor.bg, a detailed analysis made by Ilian Scarlatov - Managing Partner at the investment bank Mane Capital and Svetoslav Tassev from KBC Securities Bulgaria was provided to Rodgers prior to his interview.
The document has 4 main sections- macroeconomics, arable-land funds, companies and corporate profiles.
This section explains how the Bulgarian GDP performs under austerity measures. The report points out that Bulgaria is in the top 5 countries in the EU in GDP growth for 2012. For the period 2000-2010, the country comes 4th after Lithuania, Estonia and Slovakia in terms of GDP growth.
Bulgaria holds 2nd place after Estonia in terms of Debt-to-GDP ratio and 6th place in terms of budget deficit which stands at 0.2%.
Arable-Land Funds Section
Special emphasis is given to Advance Terafund, ELARG, and Bullend Investments. The data shows that P/B ratio on the 12th December 2011 was 0.64 and 0.72 for Advance Terafund and ELARG respectively.
The P/NAV ratio is 0.58 and 0.41 for Advance Terafund and ELARG respectively, and 0.53 for Agro Finance. Svetoslav Tassev expects that ELARG will outperform the other two funds in the next 12 months, due to the management’s decision to liquidate some of its assets.
The report goes on to compare the prices of arable land across countries. One hectare of land is sold for EUR 2,500 in Bulgaria and the Czech Republic, for EUR 4,000 in Hungary, for EUR 41,000 in the Netherlands, for EUR 3,500 in Romania, for EUR 5,000 in Poland and for EUR 10,000 in Germany.
According to the analysis, Bulgaria will receive EU subsidies in the amount of EUR 161 per hectare, while the average subsidy for the rest of the previously listed countries is EUR 292 per hectare. In the Netherlands the amount of the subsidy amounts to EUR 469 per hectare.
Companies Section (recommendations report)
The list of companies consists of Advance Terafund, ELARG, First Investment Bank, Monbat and Sopharma.
Advance Terafund is showed to have a fair value of BGN 2.28 per share compared to BGN 1.29 market value on 12th December 2011). The recommendation is Buy.
ELARG is showed to have a fair value of BGN 1.99 per share compared to BGN 0.82 market value on 12th December 2011). The recommendation is Buy.
First Investment Bank is named as the winner of the deleveraging process, with its corporate credit segment increasing from 6.28% in 2009 to 8.93% in 2011. The fair value of BGN 2.96 per share compared to BGN 1.91 market value on 12th December 2011). The recommendation is Buy.
Monbat’s dividend distribution and share repurchase policies are also highlighted. The fair value is BGN 6.11 per share compared to BGN 5.39 market value on 12th December 2011). The recommendation is Buy.
Sopharma is showed to have a fair value of BGN 2.37 per share compared to BGN 2.85 market value on 12th December 2011). The recommendation is Sell.
Corporate Profiles Section
The report analyses BG Agro, Himimport, Elprom-Zem, Enemona, Industrial Holding Bulgaria, Kaolin, M+S Hydraulic, Odessos Shiprepair Yard S.A. and Trace Group OOD.
Source: Investor.bgBack to News