(B) Blitz interview with Darik Finance

When do you expect the BSE to wake up, at the end of the holiday season or later in the year?

There should definitely be coming a more intensive period on the Bulgarian Stock Exchange, though we should not forget that it is the exogenous factors that drive the trading volume up. We need to focus on the restoration of the confidence in our economy and politics first, however, I myself am bitterly pessimistic on this case.

At the same time we need to reflect on the external factors. Even if we are in good overall standing, we need to compete with other emerging markets for the large investments, which is really hard.

I have dig recently into US analysts’ research papers, which were estimating further bank defaults by July 2009. The consequence of the current crisis is expected to reach between one and two trillion US dollars of write-downs. In more colloquial terms it means that between one and two trillion US dollars will seize intermediating the business transactions, will disappear from the economy… In such circumstances the exogenous factor remains insignificant.

Could we expect to see the Bulgarian investors, who are rich in cash, reactivate? There could be an increasing interest in the current low price levels?

There is certain amount of sideline cash awaiting in the hands of some fund managers. When will this cash penetrate the market, you’d better ask the fund managers.

We might expect more activity in September and October. My overall expectations are still bearish, but with a light of revival. There is still pressure on some funds, which will drive the market down.

If the macro data is improving and the large companies show improving results for 08Q4 this might foster the participants’ interest in the market. However, the first reports for 2009 will be much more influential. It is the big bath behavior of some of the managers that might reflect negatively on the 2008 results.