(C) The agribusiness IPOs

When the aim of the shareholders of a company such as “Zyrneni hrani Bulgaria” is to sell stakes through a regulated market, the expectations of the investors would be inclined towards discounted intrinsic value or / and lower growth potential. The reasons for this are the diminishing interest of the majority stakeholders in the business development and the lack of clear expansionary strategy.

If the shareholders of “Biser Oliva” are focused on development of their business, and this is the reason they target the capital market, the potential seen by the investors in the company growth, ceteris paribus, will trigger much more attention, rather than a company whose owners see only cashing out.

The potential for financing of the main business of the agricultural companies should be the main reason for their interest towards the BSE. I guess the need for biofuels production projects is seen currently as the magic stick for business development by most of the managers. This certainly mean better diversified sales revenue for those companies.

On the other side, we should certainly point out, that the developed economies and the world capital markets the biofuels topic is depleted. The reasons: lower efficiency of the biofuels; financially inadequate production if not subsidized; droughts due to improper planting and sowing; strong cyclicality of crop production, etc. Additionally, loud criticism against the transformation of the food of the poor nations into fuel for developed ones, was voiced by UN representatives.

With this regard my personal expectations in the agribusiness in Bulgaria are more in the development and production of food sub-products and supplements.