Yesterday the Bulgarian Stock Exchange awarded the best and most active licensed investment brokers having registered the highest results in 2016. That was the 16^th edition of the rankings that evaluate some 50 brokers which operate in Bulgaria. The public is quite far away from the matter and so the event didn’t attract much attention, but the award ceremony did thrill those strictly professional circles of brokers and also the representatives of 350 public associations with their securities being traded on this stock exchange. The Bloomberg ranked the latter 10^th in terms of return for 2016 exactly on the day of the award ceremony.

The Bulgarian Stock Exchange is a very small financial structure which began its activities in 1991 and its market capitalization is calculated to the tune of some EUR 4 bln. Judged on the statistical data for its activity it has quite a long way to go, in order to be capable of comparison to the other stock exchanges across the averagely developed European countries. Less than 100,000 deals are closed annually there worth some EUR 200 mln. This sum is negligible when we talk about stock exchange and investments. There are numerous reasons for this situation. As far as the law and financial regulations are concerned it all looks good – there are rules in force, guaranteeing decency, openness and transparency and the Financial Supervision Commission monitors everything. It controls not only stock exchange operations, but also investment brokers at their work with separate clients. No significant violations have been registered so far of the stock exchange trading rules and the Commission hasn’t interfered openly into the work of the brokers.

Its low liquidity is another reason which turns the BSE into a financial structure with no particular significance for the national economy. This means that the demand for securities is poor and the issuers are not that willing to offer for sale shares of their wallets. To say nothing of the extremely rare initial public offering of shares when a certain company wants to accumulate bigger capital. It’s just because there is no such Bulgarian capital – the financial resources of the state, the companies and the citizens are too limited for stock exchange participation and the BSE rules appear to be too rough for many.

This is the place where investment brokers appear – they are the financial structures that are to attract investors, they are to persuade their clients to step onto the stock exchange and they have to offer more profitable terms for management of the capitals they are entrusted with. However, no such activity is spotted and the stock exchange remains a huge mystery for most Bulgarians and Bulgarian small and medium-sized companies. On the other hand most of the big companies are foreign ones in their ownership and if they decide to step onto some stock exchange, they opt for other, much more active and attractive western ones.

The BSE has long realized that there is a series of objective reasons why it doesn’t work as a free market of securities and capitals. That is why there have been several attempts for its inflowing, fraternization or purchase by some big European stock exchange.

The simple fact that the major SOFIX stock exchange index and its daily fluctuations do not attract the attention of serious mass media says that the BSE established 25 years ago by a bunch of enthusiasts won’t make it for too long, if it keeps the current pace. Furthermore, the financial results of BSE themselves are not impressive at all and the minimum profit registered barely covers its existence. In other words – congratulations to those awarded!

English version: Zhivko Stanchev