Kabul Manchester migrants new government terrorism. The government in Sofia risks being seen as a new model of sovereign-wealth robber baron. This can only hurt the country and its economy.

In the wake of the collapse of the Warsaw Pact, the arrival of free markets meant the foundation, or more accurately, re-establishment, of stock exchanges throughout Eastern Europe. In little more than 20 years, the progress of many nations has been marked by a broad growth in prosperity.

Stock exchanges have been highly successful agents of that growth, raising capital for thousands of new companies operated by eager entrepreneurs throughout "New Europe. The aftermath of the credit crunch has marked the landscape throughout the region. Most central and eastern European economies have followed the the west into recession.

Governments, including Bulgaria's, have often overspent and are now becoming increasingly desperate to balance their books, having seen and suffered in the wake of Greece's debt woes.

In such times, governments must always balance the need to grasp what they see as low-hanging fruit against the danger of stifling the economy.

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The Bulgarian Ministry of Finance is about to wildly overstep that fine line at an Extraordinary General Meeting of the Bulgarian Stock Exchange on Sept. On the docket for that meeting is a proposal to issue new stock that only the Ministry of Finance can purchase.

This would be a disaster. Certainly the Bulgarian Stock Exchange does not remotely require central government control. The exchange is a robust business with excellent IT systems from Deutsche B?

The exchange's value may be down from the up to? But the government's claim that the exchange is worth just? The exchange has some?

Nevertheless, the government is seeking to take over the exchange at "par" value. How can this be possible? For starters, the majority of the exchange's current management is appointed by the government.

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Thus the government has been able to muscle through the story that it must increase its stake in order to protect the remaining shareholders from "hostile takeover" after the exchange goes public. Even in the event of a liquidation break-up, the bourse is not remotely in danger of going out of business. The main risk of that happening, ironically, is from this impending, state-sponsored par-value acquisition.

By seeking an exclusive right to buy a highly dilutive issue of new shares, the Bulgarian Ministry of Finance would be paying fraction of the exchange's market value to gain control of the nation's financial infrastructure. We do not want to overstate the importance of exchanges to the overall economy. But a discount nationalization of the Bulgarian stock market will send out a deeply negative message to local investors. And from the perspective how to get yocash for free on yoville foreign direct investment, this move could be catastrophic for Bulgaria, at a time when nations throughout "New Europe" are already competing intensely to secure foreign investment.

What message does diluting stockholders at the stock market itself send to the global investment community? Somewhat bizarrely, the Sept. Will investors really rush to buy shares knowing that the previous owners were brutally diluted after spending many years supporting the fledgling market as it gained critical mass?

We suspect that investors will turn instead to other areas of New Europe, where there are fewer threats to their portfolios from arbitrary acts of confiscatory government fiat. We strongly urge the Bulgarian Ministry of Finance to rethink their stance on this short-term and ill-considered act.

Nobody wishes to see capitalism broker for binary options trading from 10 minutes exploited by so-called "robber barons.

This can only harm the nation, its economic development, and the well-being of the citizens. Buy sofia stock exchange if this blunder is eventually undone, markets can have long memories and Bulgarian capital markets could be stigmatized for years to come. Neither the government money maker black keys tab the exchange's management can be regarded as credible capitalists, let alone agents of freedom if this "deal" is permitted.

Papazov is the founder, former CEO and chairman of the Bulgarian Stock Exchange ; Mr. Young is an investment adviser and author of "The Exchange Manifesto" Derivatives Vision Publishing, A well written article, but some assertions in it simply don't make sense.

For example, if the government only owns In this case, surely the key argument that you make above about the pre-existing buy sofia stock exchange being diluted is a mistake on their part pertaining to the past, and not about the present or the future? Also, assuming that the government wishes to realise it's stake in the bourse, prospective investors in an IPO will need to be assured that a they trust the management, can vote to change the management and that the government wil nolonger be in control, and b that there is a reasonable chance that the shares they purchase will start trading at a premium.

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It therefore seems entirely reasonable to me that the pre-existing government controlled board would accept a valuation at below 'book' value. You mention the amount of 'cash' on the books, but a large part of that may be in 'intangibles', not easily realised?

Those facts are perhaps unknown?

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It is possible that the bourse does actually need cash at this point, but this is perhaps unknown. Finally, the price of a security usually comes to reflect it's value, at some point in time and it is possible that the actions that the government are taking will actually resolve the issue of 'control' and potentially enhance the value of the shares, considerably?

Ultimately, that might not be a bad thing for pre-existing shareholders, should they choose to remain invested? The Sofia Stock Exchange. Photo by Sofia Photo Agency. From The Wall Street Journal By Victor Papazov and Patrick L.

WSJSofia Stock ExchangeBulgarian Stock Exchangestock exchangeVictor PapazovFinance Ministry. More from Views on BG. Please, log in to post a comment. Dividing line between Brussels and Ankara remains deep despite attempt for support.

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The editorial staff also publishes a daily online newspaper "Sofia Morning News. Foreign media analysis on Bulgaria and World News in Brief are also part of the web site and the online newspaper.