The economy of Bulgaria functions on the principles of the free market, having a large private sector and a smaller public one. The Bulgarian Stock Exchange (BSE or SOFIX) is operating in Sofia, the capital of Bulgaria. It was founded in 1991 as a joint stock company.
The SOFIX decreased 25 points or 3.96% since the beginning of 2022, according to trading on a contract for difference that tracks this benchmark index from Bulgaria.
What are the main types of shares?
Historically, investing in the stock market has been one of the most essential routes to financial success. Some of the main types of stocks include:
Common or ordinary shares
Most people’s investments are in common stocks. It is common knowledge that in the event of a company’s dissolution, shareholders are entitled to receive a proportional share of the company’s remaining assets.
When a business declares bankruptcy, preferred stockholders have a financial advantage over common stockholders. Preference stockholders receive dividends before common stockholders.
As a result, preferred stock more closely resembles fixed-income bond investments than common stock does.
A large-cap stock is any publicly traded corporation with a market capitalization of more than $10 billion. Often referred to as large-cap stocks, large-cap stocks are frequently regarded as the stock market’s stalwarts or blue chips.
While many investors prefer smaller, rapidly growing companies, large-cap stocks can be tremendously helpful to those who take the time to research them.
Medium-cap stocks are companies that are considered “just perfect” for investors looking for a mix of growth and profitability.
Mid-cap stocks are those with a market capitalization or worth of less than $1 billion. They are referred to as mid-cap equities since they fall between small- and large-cap stocks.
Small-cap is an abbreviation for small market capitalization, which is calculated by multiplying a company’s share price by the number of outstanding shares. When a company’s market value is between around $300 million and $2 billion, it is defined as having a tiny market capitalisation.
Investments in growth stocks often carry a higher degree of risk, but the potential profits can be enormous. If a company has a strong and rising demand for its products and services, particularly concerning long-term developments in society, it is a good growth stock.
Investors can expect regular dividend payments from many publicly traded companies. As a result of their dividends, dividend stocks are highly sought after in some investment circles.
Safe stocks are less volatile than the overall stock market since their share prices vary less. Low-volatility equities, often known as safe corporations, operate in industries that are less sensitive to economic fluctuations. These firms’ dividends can help ease the pain of falling stock prices.
ESG investing is a type of investing that prioritizes environmental, social, and governance factors. ESG principles aim to address various collateral implications for the environment, corporate employees, consumers, and shareholder rights rather than focusing just on whether a firm earns a profit and grows its revenue over time.
Blue-chip stocks consist of businesses that are leaders in their fields and have established strong reputations. They do not always produce the best returns, but their consistency makes them popular with investors who have lower risk tolerance.
Penny stocks are low-quality enterprises with extremely cheap stock values, usually less than $1 per share.
What are the advantages of trading shares in Bulgaria?
Buying and/or selling shares present the following benefits:
- Shares allow investors to benefit from a growing economy. As growth is experienced in the overall economy, corporate earnings will subsequently increase. This is attributable to the fact that economic growth will create more employment opportunities, which will generate income and create sales.
- The stock market offers a low barrier of entry to beginner and professional investors alike. Investors can purchase shares online, through a broker, or a financial planner.
- Stocks offer two ways through which money can be made, by receiving dividends and by buying low and selling high, which generates profits.
What are the disadvantages of trading shares in Bulgaria?
The disadvantages involved with trading shares include the following:
- A high degree of risk because investors can lose their entire investment, especially if they do not diversify their portfolio as part of a strategic risk management plan.
- Preferred shareholders are paid first, which means that common shareholders are paid last if a company goes bankrupt.
- The stock market is extremely volatile, and it can present an emotional rollercoaster for investors who do not possess the right amount of discipline just yet.
What are the 10 Best Shares to Buy in Bulgaria?
1. Neochim AD (BSE: NEOH)
Neochim AD is a fertiliser manufacturing company based in Bulgaria that operates in the Chemicals sector. The Company manufactures or mixes fertilisers such as ammonia, nitric acid, and urea. Nitrogen Fertilizer Complex, Organic Production, Repair and Mechanical Works, Railway Station, Infrastructure are the various production facilities.
2. CB First Investment Bank AD (BSE: FIB)
First Investment Bank AD (Parva investitsionna banka AD, FIBank, PIB) is a Bulgarian bank that offers corporate and retail banking services. Corporate and retail deposits and loans, current accounts, small and medium-sized company (SME) financing, micro-lending, debit and credit card services, letters of credit, bank guarantees, mortgage lending, and in-house banking services are among the financial services offered by the bank.
It operates in the United States through a network of branches and offices spread around the country. Furthermore, it has one branch in Cyprus. First Investment Finance BV (the Netherlands), First Investment Bank-Albania Sh.a., Framas Enterprises Limited, Debita OOD, Balkan Financial Services OOD, Realtor OOD, Zdravnoosiguritelna kasa Fi Helt AD, and Diners Club Bulgaria AD are among the bank’s subsidiaries.
In August 2013, it purchased the whole capital of MKB Unionbank EAD.
3. CB Central Cooperative Bank AD (BSE: CCB)
Central Cooperative Bank AD (Tsentralna Kooperativna Banka AD, CCB or TSKB) is a commercial bank located in Bulgaria that offers retail banking, corporate banking, and other financial services.
Corporate and retail deposits and lending, current accounts, small and medium-sized enterprise lending, micro-lending, debit and credit card services, letters of credit, bank guarantees, insurance services, pension social security services, money transfers, overdrafts, mortgage lending, securities transactions, as well as online banking services and safe deposit boxes, are among the banking services offered by the bank.
The bank operates through a network of branches and offices throughout Bulgaria, as well as one in Cyprus.
4. Sirma Group Holding AD (BSE: BGSGH)
Sirma Group Holding AD is a firm located in Bulgaria that works in the information technology IT industry. The company works via more than 20 subsidiaries and joint ventures that specialise in various fields of information technology: System Integration, Software Development, Information Technology IT Consulting Services, Core Semantic Technology, Text mining, Web mining, computer-aided design CAD, computer-aided manufacturing CAM systems, Payment Portal, Electronic Banking services, Customer Data profile management and collection, Scoring, Workflow, Reporting and Risk services, Business Intelligence, Notification and Statements, Trading and FX.
5. Advance Terrafund ADSITS (BSE: ATER)
Advance Terrafund ADSITS (Advance Terrafund REIT) is a real estate investment trust located in Bulgaria that is regulated by the Bulgarian Financial Supervision Commission. It specialises in real estate securitization and invests in the industry by obtaining titles and other rights to land and real estate.
Advance Terrafund ADSITS obtains property rights on agricultural, urban, and forest land with the intent of leasing, renting, or selling it. Karol Finance EOOD was the Company’s largest stakeholder as of December 31, 2011, with an 18.61 percent interest.
6. Bulgarian Real Estate Fund ADSITS (BSE: BREF)
Bulgarian Real Estate Investment Fund ADSITS is a real estate investment trust founded in Bulgaria. The primary operation of the Company is real estate investing. The Company buys property rights on self-contained individual properties comprised of newly constructed multifunctional administrative, residential, and commercial buildings with the intent of renovating, leasing, renting, or selling them.
The Company specialises on real estate properties in industries such as business, tourism, agricultural, retail commerce, and investment lands.
7. Chimimport AD (BSE: CHIM)
Chimimport AD is a holding corporation established in Bulgaria. Its activities include the acquisition of shares, the reorganisation and management of its subsidiaries, the formation of new subsidiaries, capital investments, and financing of other firms in which the Company has direct shareholdings.
The subsidiaries of the Company are involved in financial services, commerce and production, air, sea, and river transportation, real estate, construction, and engineering, among other things. Chimimport AD has subsidiaries in Bulgaria, Russia, Slovakia, Macedonia, the Netherlands, Seychelles, and Germany.
Chimimport Invest AD, with a 72.22 percent ownership in the company, is the company’s largest stakeholder.
8. Stara Planina Hold AD (BSE: SPH)
In Bulgaria, Stara Planina Hold Plc produces and distributes hydraulic systems. It sells hydraulic motors, hydrostatic steering units, brakes, and accessories, as well as plunger, piston, telescopic, and rack cylinders, starter, traction, and stationary batteries, and accumulators. Essential oils are also available, as are perfumery and cosmetic items like as face and body creams, shampoos, conditioners, body lotions, glycerin soaps, and others.
It also sells men’s, women’s, children’s, pelerine, and athletic socks made of cotton, polyamide, polyester, acryl, elastane, wool, wool and acryl, viscose, and other materials, as well as children’s stockings and ladies’ and men’s knitwear. In addition, the firm sells grain combines’ replacement components. It also manufactures perforated metal sheets, replacement parts and non-standard equipment for special projects, metal legs and metal frames, as well as the manufacturing and maintenance of adjustable sieves, straw walkers, grain pans, augers, and header augers.
In April 1999, the corporation changed its name from Central Privatization Fund to Stara Planina Hold Plc. Stara Planina Hold PLC was founded in 1996 and is headquartered in Sofia, Bulgaria.
9. Sopharma (BSE: BGSFA)
In Bulgaria and globally, Sopharma AD conducts research and development, manufactures, and trades in medicinal ingredients, finished drug forms, animal vaccines, infusion solutions, and plastic medical disposable goods for human and veterinary medicine, as well as food supplements. It provides products in a wide range of therapeutic areas, including cardiology, gastroenterology, pain management, cough and cold, immunology and dermatology, respiratory and asthma, neurology and psychiatry, urology, and gynaecology.
It also purchases, collects, grows, produces, and trades in herbs and medicinal plants; provides secondary packaging services for pharmaceutical products and real estate leases; trades, transports, and packages radioactive materials and nuclear equipment for medicinal use, household electronics, and electrical equipment; and purchases, collects, grows, produces, and trades in herbs and medicinal plants. Furthermore, the firm is involved in the retail trade of medicinal items and medical equipment, the manufacturing of non-medicinal and other products, franchising, know-how, and property rental, as well as trading, advising, and other operations.
Sopharma AD was established in 1933 and is based in Sofia, Bulgaria.
10. M+S Hydraulic AD (BSE: MSH)
M+S Hydraulic AD is a Bulgarian firm primarily involved in the industrial equipment market. It primarily manufactures, distributes, and repairs hydraulic motors, steering units, valves, brakes, and accessories. Hydraulic motors, hydraulic disc brakes, crossover, switch, and relief valves for hydraulic motors, as well as hydrostatic steering units and steering unit components, are all available from the company.
M plyus S invest EOOD and Lifam Hidravlika are the Company’s two subsidiaries, whereas Balkars Konsortium OOD, SPKh Trans OOD, and Progres AD are its three connected firms. Stara Planina Hold AD was the Company’s largest stakeholder as of December 31, 2012, with a 30.91 percent interest.
Are common and preferred shares the same?
No, common and preferred shares are different types of shares, each with unique attributes, advantages, and disadvantages. Common shares are the typical shares that investors purchase in the stock market.
Which stocks are the best option for beginner investors?
Penny stocks are a good place to start for beginners who are getting to know the stock market.
What are the benefits of investing in shares?
The chance to diversify the investment portfolio, the ability to earn money in two ways, a hedge against inflation, long-term wealth, and several others.
What are the disadvantages of investing in shares
Investing in shares has a high degree of risk because investors can lose their entire investment, especially if they do not diversify their portfolio as part of a strategic risk management plan. The stock market is volatile and can present an emotional rollercoaster for investors.
Can I day trade shares?
Yes, you can use day trading shares by buying low and selling high.