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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2008BULGARIAN STOCK EXCHANGEIn 2007, the BSE registered a 90% increasein its market capitalization.Bistra IlkovaCEOThe Bulgarian Stock Exchange (BSE) achievedsignificant results in 2007 and there are goodreasons to believe that 2008 will also bebeneficial to all participants on the local capitalmarket. Last year we registered a 90%increase in the market capitalization of ourexchange, which accounts for more than 50%of the GDP. The turnover in 2007 went up193%. Our official index SOFIX grew by 45% inone year. The total amount of money that wasraised through the stock market–IPOs,secondary listings, increase of capital andbond issues–reached a record EUR 750million.Although we are very pleased with theseresults, we see new challenges in front of us.We have fixed our priorities for 2008 as toincrease the number of listings, to proposenew services and products and to introducetechnological innovations. As of today, 50-60private companies have declared theirintention to finance their business projectsthrough the capital market. This proves thatthe Bulgarian stock market has gained a lot ofpopularity and is seen as a real alternative tobank lending, which was not the case 2-3years ago.With Bulgaria’s entry into the European Unionon 1 January 2007 our Exchange is gettingmore and more involved in the process ofintegration and consolidation of the capitalmarkets in Europe. A major stepin this direction was the signing of anagreement between the BSE and DeutscheBoerse, according to which our current tradingplatform will be replaced by the Germansystem XETRA. This will give a lot moreopportunities to the Bulgarian investors andbrokers to gain access to the developedEuropean markets and vice-versa; foreigninvestors will have a better chance to invest inBulgarian stocks.In 2008, we will continue our efforts to developregional cooperation on a bilateral andmultilateral level. We believe FEAS plays a veryimportant role in this respect and has done alot for the promotion of our capital markets ona global scale.FUTURE OUTLOOKThe priorities for the BSE in 2008 will be toattract new listings, increase the liquidity,introduce new products and technologicalinnovations.As a result of the BSE’s efforts to popularize thestock market among as many local privatecompanies as possible, including the helpof road-shows and regional roundtablediscussions, about 60 medium and large sizedcompanies have publicly declared theirintention to raise capital and finance their futureprojects through the Exchange. In 2007 we hada record number of IPO’s and we expect nextyear to reach even higher number.Through the popularization of the stock marketwe observe an increasing number of smallerplayers investing on the stock market. We hopethat this trend will continue in 2008 with the aimof increasing the liquidity. Thanks to ourCOBOS online trading system the number ofindividual investors that trade from their homeshave increased drastically.One of the major changes in the developmentof the BSE in 2008 will be the connection toDeutsche Boerse’s XETRA trading platform. Theaim is to start the system by June of next year.This will bring new benefits for the local traders,but will also give the foreign players access tothe Bulgarian capital market. It is expected thatthe BSE’s partnership with Deutsche Boerse willincrease the visibility and the interest towardsour market.CONTACT INFORMATIONContact Name Mr. Panteley KarassimeonovE-mail bse@bse-sofia.bgWebsite www.bse-sofia.bgPAGE 46