Greek bourse plans Bulgaria bid, 2006 profits record steep increase

SOFIA – Hellenic Exchanges, the operator of the Athens Stock Exchange, intends to bid for Bulgaria’s bourse and sees 2006 profits surpassing 2005 levels significantly, its chief executive said yesterday. Spyros Kapralos said the Greek bourse will offer a fair price to the Bulgarian government when it decides to sell its stake and also proposed that Sofia join the common trading platform it launched with Cyprus last October. «If the Bulgarian government decides and intends to sell its 44-percent stake in the exchange, our group along with the Cyprus Stock Exchange will be interested in reviewing the issue and offering a fair price,» Kapralos said. «On the other hand, we made a proposal, if the exchange remains independent, to create a regional hub that would only be beneficial,» he said. Last year, Bulgaria said it was seeking a strategic investor for its controlling stake in the country’s bourse as part of plans to increase liquidity and withstand tougher competition within the European Union, which it joined on January 1. Sofia’s bourse saw its market capitalization doubling to 17.7 billion levs (-9.05 billion) at the end of January from a year before, but the companies listed there are small, volumes are low and initial public offerings are few. It has held initial acquisition talks with Deutsche Boerse and with the Nordic and Baltic bourse operator OMX. The exchanges in Milan, Vienna and Warsaw have also expressed interest. Kapralos declined to estimate the value of a possible deal in Bulgaria but said the group has enough cash to carry it out. He said he expected 2006 profits to increase significantly for Hellenic on the back of higher liquidity and a successful cost-cutting program. «The guidance for 2006 is that the results will be much, much higher than the year earlier,» Kapralos said. The Athens Stock Exchange’s total market capitalization, including all listed shares, rose 28.3 percent year-on-year in 2006 to 158 billion euros, with foreign investors owning 28.6 percent of the free float. Kapralos declined to comment on where he saw first-quarter profit, but said he was encouraged by the higher trading volumes so far this year, continuing last year’s trend. «Last year we had a 63 percent increase in trading activity and average daily trading volume was -340 million versus -210 million in 2005,» Kapralos said. «That has improved dramatically our profitability.» He said a larger part of the 2006 profit would be distributed to shareholders, but did not elaborate.

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