How Liquid Is The Bulgarian Capital Market
Last Updated on April 26, 2026 by Bulgarian Citizenship Team
It is no secret that the Bulgarian capital market lacks liquidity. A simple look at the closing trades on the Bulgarian Stock Exchange on 4 February 2026 illustrates this clearly. A single transaction — the purchase of just one share of First Investment Bank — resulted in a price increase of 4.22%. As a consequence, all outstanding shares were revalued at +4.22%, increasing the total market capitalization of the bank by the same percentage.
This is not a reflection of fundamentals — it is a symptom of illiquidity.
FIBank: fundamentals vs. market mechanics
Despite frequent media speculation over a potential sale that has not materialized for more than 15 years, First Investment Bank remains one of the most innovative banks in Bulgaria. It offers competitive products that many local banks do not.
Notably, FIB was the first Bulgarian bank to introduce a mobile application allowing direct trading on the Bulgarian Stock Exchange without the need for a brokerage intermediary. In many ways, this is the Bulgarian equivalent of Revolut — but with roughly half the fees. Lending interest rates are indeed higher than the market average, yet the bank compensates by offering alternative investment products, at a time when most Bulgarian banks provide only 0–1% annual interest on deposits.
For example, DSK Bank offers no interest on idle corporate cash, while BACB offers only minimal interest.
Why does the government seek a liquid market?
A liquid market ensures smooth transactions, fair price discovery, and overall market stability. Liquidity benefits investors by enabling efficient trade execution, portfolio rebalancing, and lower transaction costs.
Now imagine a company’s capitalization falling by 4% simply because one investor sold a single share at a lower price. This is not market efficiency — it is structural weakness.
Should investors avoid the Bulgarian capital market?
No. On the contrary — the market needs more participants. Increased investor activity would improve liquidity and lead to fairer pricing. That said, investors must be selective.
For example, at Bulgaria AIF Fund, we would prefer purchasing a First Investment Bank bond with a 7% coupon rather than buying FIB shares. The reason is straightforward: liquidity risk. A buy order of EUR 500,000 would push the stock price sharply upward, while a sell order of the same size would drive it sharply downward.
In this environment, equities should serve primarily as diversification alongside bonds. These are major Bulgarian companies with a low probability of default, but stock trading under such conditions resembles a poker game — particularly for foreign investors. For one participant to gain, another must lose. Entering an unfamiliar and illiquid market without local expertise is inherently risky.
This is precisely why professional portfolio management matters. Investing through a fund provides diversification, discipline, and risk control. While we are aligned with Bulgaria’s national policy of developing the local capital market, we do not pursue this goal at the expense of our investors’ capital.
Update on the Bulgaria Golden Visa Program
The first year of the program was a classic ping-pong game for early applicants. That is usually the case — initial applicants always face delays while the administration builds experience.
Today, the process is far more streamlined. We are now seeing pre-approval timelines drop to as little as four weeks (PS: for applicants processed by our team), compared to the official deadline of ten weeks. This is a meaningful improvement and a clear sign that the system is maturing.
Capital Allocation of Bulgaria AIF Fund
Capital allocation remains slow, despite the steady flow of opportunities. We receive numerous proposals for potential allocations. While we are comfortable investing in corporate bonds, we are also exploring diversification into private capital.
2026 is expected to be an active year for corporate bond issuances in Bulgaria, particularly from well-established companies across different sectors. Find the list of expected bond IPOs in Bulgaria for 2026.
We expect a number of new bond offerings during the year. The first bond issue will be from Elana AgroCredit on 9 March, offering an interest rate of 3.75% plus six-month EURIBOR. Elana AgroCredit operates in the agricultural financing sector and is owned by a group of institutional investors, including Bulgarian pension funds. Given its shareholder structure and business model, the company is generally regarded as a stable and reliable issuer.
We also expect an IPO from ITF Group, operating in the retail financing sector, with an anticipated return of around 11%. Sofia Commerce, a company active in secured lending and pawn financing, is expected to offer an issuance at approximately 8%. In addition, Central Cooperative Bank is preparing an MREL issuance expected in the first half of the year as part of its regulatory capital requirements. Overall, between 15 and 20 bond issuances are anticipated in 2026, offering a range of maturities and interest rates to suit different investor profiles.
