The Balkan

The Balkan - a new convergance play

After successfully investing in Central European stockmarkets like Hungary, Poland and the Czech Republic during recent years it should be very profitable to realize these profits and move to the Balkan countries that will be next to enter the EU. I recommend to reduce positions in my previous recommendation Central European and Russia Fund (NYSE: CEE - 24,02 USD) and invest in the "East Capital Balkan Fund" a Swedish Mutual Fund launched today October 1st, 2004. This fund seems to be the best possibility to participate from the expected enduring bull market in the Balkan as brokers and banks are unable to trade in these markets.

The Balkan Fund is issued by East Capital, an independent Swedish asset manager specialising in Eastern European financial markets, with around 700 MUSD in assets under management and very good performance in its established funds. East Capitals Homepage may be found here: http://www.eastcapital.com/index.php3?lang=en

Specific information about the Balkan Fund: http://www.eastcapital.com/vid.php3?lang=en&menu_id=137

The Balkan countries have gone through fundamental change during the last years. Strong economic growth, increased investment activity and decreased country specific risk have provided attractive possibilities on the Balkan stock markets, while company valuations are still low. Sectors that have been particularly good for investment are among others construction, banking and tourism.

The convergance to developed European markets and the new entrants to the EU should offer above average returns of at least 30% p.a. during the next years.

Interesting links for investments in the Balkan:

http://www.sem-on.net/ The Stock Exchange Monitor, a source of information on the Southeast Europe stock markets.

http://www.bvb.ro/ Bucharest Stock Exchange

http://www.rasd.ro/index_en.html RASDAQ (Romania)

http://www.bse-sofia.bg/ Bulgarian Stock Exchange

http://www.mse.org.mk/index-e.asp Macedonian Stock Exchange (Skopje)

http://www.zse.hr/ The Zagreb Stock Exchange (in Croatic only)

http://www.bulbrokers.bg/ Bulbroker is an internet broker of stocks in Bulgaria

Indices from the Balkan: ( as of Oct. 1 2004 - for an update see: http://www.sem-on.net/cgi-bin/jve.cgi?doc=2066&sid=n3PwELQBbhUpNb80 )

Exchange	Index	Value	52-Week Return	Turnover (mio EUR)

VSE	VIN	1,096.31	+121.1%	0.485
LJSE	BIO	118.90	+3.7%	7.299
LJSE	PIX	4,382.37	+62.3%	7.299
LJSE	SBI20	4,835.45	+49.5%	7.299
LJSE	SBINT	4,458.20	+42.9%	7.299
LJSE	IPT	4,015.65	+49.7%	7.299
LJSE	HRP	3,447.69	+8.5%	7.299
LJSE	KEM	4,666.22	+46.2%	7.299
LJSE	NAF	6,146.48	+51.4%	7.299
LJSE	TRS	4,841.12	+71.5%	7.299
LJSE	TRG	3,544.81	+55.0%	7.299
MSE	MBI	1,278.90	+25.4%	0.025
NEX	NEX20	2,061.40	+122.4%	0.034
NEX	NEXPIF	1,467.66	+42.2%	0.034
SASE	BIFX	3,717.17	+212.3%	0.000

Indices from major markets on the Balkan:

Country Index Yahoo-Symbol Oct. 1 2004

Romania RASDAQ ^RSQALL 1512.78

BET 3340.87*

ROL/€ 41.074*

Bulgaria SOFIX ^SOFIX 592.08

BGN/€ 1.95583*

Croatia Crobex ^CRBEX 1376.40

Crobis 101.50

Macedonia MBI 1293.14 *

MKD/€ 61.456 *

* Price as of Oct. 7, 2004

http://www.mse.org.mk/index-e.asp Macedonian Stock Exchange (Skopje)

http://www.zse.hr/ The Zagreb Stock Exchange (in Croatic only)

http://www.bulbrokers.bg/ Bulbroker is an internet broker of stocks in Bulgaria

Gustavia Balkans is a fund managed by Gustavus Capital, another small asset manager in Sweden. It is investing in the Balkan but also East European countries like Hungary, Russia and Slovenia. http://www.gustavuscapital.se/

NAV Oct. 8, 2004

East Capital Balkan 9.99

Gustavia Balkans 159.98