Развитие и състояние на българския капиталов пазар
The Development and Current State of the Bulgarian Capital Market

Summary/Abstract: This paper investigates the development of the capital markets in Bulgaria, with an emphasis on stocks, from the new millennium to present days. The tasks are: to trace the stock market activity – market cap, turnover and IPOs; to compare similar indicators of other countries in the European Union (EU) and the world; to perform a literature review of the factors determining the development of the capital markets; to analyze those factors that hinder the development of the Bulgarian Stock Exchange (BSE); to compare and contrast cash balances (flows) of the financial assets in the country by economic entities; to review the structural changes on the basis of comparisons to EU countries; to outline the potential sources for the capital market growth. The research thesis postulates that there is significant potential for the development of direct intermediation (stock market) in Bulgaria, but its development is hampered by a number of factors related to the institutional framework of property rights, corporate governance and high concentration of ownership of listed companies. The main conclusions are that the Bulgarian capital market has low primary market activity, low turnover on the secondary market and low capitalization relative to GDP. The main part of equity is unquoted shares and other capital. The share of loans from financial assets is large. Obstacles to the development of the capital market are the protection of property rights, corporate governance, control of insider trading, lack of viable capital projects and the weak protection of minority shareholders in the highly concentrated shareholder ownership.

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