Sofia Stock Exchange has been the top performer in South East Europe since the beginning of the year, according to a Financial Times ranking.

The region's top performer is Bulgaria with a rise of 29% in USD terms and 22% in local currency. According to FT data, that's the world's best in USD terms and second only to Zambia in local currency.

According to the article the markets in the region have benefited, first of all, from the coherent international support extended by the European Union and the International Monetary Fund from 2008 onwards, with programmes for Hungary, Romania, and Serbia.

These combined with the so-called Vienna Initiative, an informal grouping of multilateral agencies and international banks active in eastern Europe, which successfully put pressure on the banks not to pull out of the region.

Next, while it was already clear by mid-2009 that the region would avoid financial meltdown (and that Europe had much bigger difficulties in Greece, Ireland and Portugal),  it has taken time for any confidence to return. But at least conditions aren't getting worse – so bottom-fishing investors smell opportunities.

Also, unlike the EU's Mediterranean problem countries, public and private debt levels are generally low – around 75 per cent of GDP combined for Romania and even less for Bulgaria.

The author of the article Stefan Wagstyl warns however that it would not take much to turn these markets, especially as a lot of the investment is controlled by fast-moving foreign fund managers.

Bulgaria's only stock exchange became a public company in the middle of December last year after the Financial Supervision Commission approved its prospectus and the bourse was listed on its own platform. The capital of the bourse is a total of BGN 6 582 860 at BGN 1 apiece.

Bulgaria's Finance Ministry raised at the beginning of October its share to 50% plus one share from 44% in the country's stock exchange. The government bought 715,000 shares at BN 1 apiece. The bourse will sell the remaining 50% held by private investors including brokerages and banks.

FULL text of the article READ HERE