site.btaBulgarian Companies Will Become More Expensive with Eurozone Accession, Says Bulgarian Stock Exchange Director

Bulgarian companies will become more expensive with the accession to the eurozone said Manyu Moravenov, Executive Director of the Bulgarian Stock Exchange (BSE), during an information event on the euro held in Blagoevgrad as part of the nationwide information campaign for the introduction of the single European currency in the country. 

“The adoption of the euro will benefit the Bulgarian capital market, because it trades with a representative sample of the Bulgarian economy. The price of Bulgarian companies will rise,” Moravenov emphasized. He added that this effect is already visible. The main index of the exchange, SOFIX, ranks among the leaders in growth in Europe. Small investors are also increasing, with their number up 30% this year. 

Joining the eurozone will create opportunities for integration and partnerships between the BSE and capital market institutions in Europe. “We are in serious talks with other small exchanges in the Eurozone. This will be a focus in the coming years,” Moravenov added. 

“Currency risk is part of the market valuation of every company. It will disappear, and this will broaden the circle of investors. Even though the lev has been pegged to the euro, if investors consider it a different currency, there is still risk,” Moravenov said. He explained that some global investors are not even allowed to work with financial instruments in currencies such as the lev, while for others currency conversion poses a problem. 

Another essential element is the country’s credit rating, where the respective company operates. Bulgaria’s sovereign rating has already been upgraded, and another increase of at least one point is expected next year. This allows for cheaper debt issues not only for the state but also for Bulgarian businesses, Moravenov noted. 

Overall, Bulgaria’s entry into the eurozone means more trust, more investments, and cheaper capital, Moravenov stated.