Financial news

Bulgaria's current account deficit increased by nearly 44 per cent in March 2004, year on year, Bulgarian National Bank (BNB) balance of payments data show. The trade balance for the first quarter of the year deteriorated by nearly 75 per cent on the year-ago period. The current account gap in March stood at EUR 126.2 million, compared to EUR 87.8 million a year earlier. For the first three months of the year the deficit totalled EUR 481.4 million, or 2.5 per cent of GDP, compared to EUR 391.3 million (2.2 per cent of GDP) last year. The widening of the gap was mainly due to increased imports and trade deficit.

Foreign direct investment (FDI) in Bulgaria for the first quarter of 2004 amounted to EUR 294.1 million, up 13.1 per cent on the year-ago period, preliminary data of the Bulgarian National Bank show. For the first three months of the year no receipts from privatisation deals were registered. 83.8 per cent of foreign investment, or EUR 246.3 mln represent the increase of the amount of credits granted by mother companies to enterprises of foreign interest in Bulgaria.

 Economic growth over the past few years has been registered in only 10 Bulgarian municipalities – Pleven, Sofia, Bourgas, Varna, Veliko Tarnovo, Gabrovo, Plovdiv, Rousse, Stara Zagora, and Shoumen, NSI data show. Most of the municipalities are defined as industrially underdeveloped regions, underdeveloped rural or mountain regions.

Privatization

Kohav Ltd. bought Dom na Kulturata (Home of Culture) – Varna, PA announced. The open-bid tender was won at a price of BGN 1.850 mln. Dom na Kulturata – Varna is a self-contained part of Navigation Maritime Bulgare SP JSC – Varna. The bidding started at BGN 1 250 000, and the bidding step was BGN 50 000. The price is due payable through bank transfer.

Companies

Bulgaria's fertiliser maker Neochim JSC will invest EUR 9.0 million in modernisation in 2004, the company said. The sum is divided into two projects, the first one of which envisages a EUR 5.0 million upgrade of the company's ammonia production unit. The revamp will grant an increased capacity and safety of the working process for the next 15 years. the French Manoir Industries was selected to supply the needed equipment. Another EUR 4.0 million will be invested in construction of own electricity generators which will use the waste steam released from the chemical processes in the plant. Neochim will finance the two projects with own funds.

Domestic trade in non-ferrous metals has come to a standstill following China's decision last month to cut down sharply on imports of raw materials which sank global prices, the local Association of Traders in Non-Ferrous Metals said on Monday.  Local copper-zinc scrap now sells at USD 1,300 per ton versus USD 1,500-USD 1,600 per ton a month ago. Aluminium scrap has cheapened from USD 1,300 to USD 1,050 per ton. Bulgarian plants traditionally process some 950,000 tons of ferrous scrap annually. Of these, 700,000 tons are purchased by the Kremikovtzi and Stomana steel works, and the remainder is exported. In terms of non-ferrous scrap, exports account for 75 per cent. This trend will probably persist in the coming years as local plants operate on concentrates mostly.  

Smolyan-based Pamporovo JSC has acquired 245,000 shares of Economic and Investment Bank, or some 7 per cent of the bank's equity, raising its stake to 9.79 per cent. The Central Depository registered the transaction on February 13, 2004.

Actavis pharmaceuticals, which is the common trademark of Icelandic Pharmaco's companies, has donated over 1 tonne of medicines to Afghanistan. The whole shipment has been manufactured in the group's Bulgarian works in Dupnitsa, Troyan and Razgrad, Actavis CEO Mr. Kristjan Sverrisson said. The donation exceeds USD 40,000 in value and includes broad-spectrum antibiotics, most of which for tuberculosis. The fact that Iceland's government asked us to help this initiative is a huge recognition for Actavis and the quality of our products, Sverrisson commented. 

Toplofikatzia Rousse reported a BGN 1 mln profit. In 2004, the company is planning the number of its clients, which is currently 15 400, to grow with 35 per cent. Its investment programme includes BGN 4 million, which will be used for the modernization of the heat distribution network on the territory of Rousse and the joining of some 1600 new clients. Another BGN 4 million will be invested in electricity production in 2004.

Local cosmetics firm Aroma and its French peer Lancome are locked in a trademark battle over the use in Bulgaria of the word 'aroma' in the names of their products. The trademark dispute is watched closely not only because of the sales at stake but also because it could provide a precedent for the entry on the local market of other foreign brand names and products. After the Sofia city court upheld the refusal of the Patent Office to register a Lancome brand containing the word 'aroma,' Dnevnik learned that the Competition for the Protection of Competition has ruled that the Lancome product does not breach domestic competition rules. The dispute is likely to be played out several times over before higher jurisdictions, including abroad where both companies market many of their products. Aroma and Lancome refused to comment, citing the ongoing litigation. 

Bulgaria’s Bolyarka brewery has opened a degustation centre following the example of Guinness in Dublin. The centre is included in the tourist catalogue of the region. The visitors to the Cultural Tourism 2004 exchange, due to be held in Veliko Tarnovo June 10 through 12, will see all stages of beer production, test the popular local brands and learn interesting details about degustation. Tourists can also visit the museum, where exhibits include original beer glasses from 1892, when the enterprise was established.

The 170-th anniversary of the Bulgarian light industry is going to be celebrated on June, 4-th 2004 in Sliven with the motto "Challenges to the textile, tailoring, leather and shoemaker's industry in the process of joining to EU". The celebration is organized by the Bulgarian textile and ready-made clothes association and the Branch union of leather, leather dresser's, shoemaker's and haberdasher's industry and it is a part of a common project of BIA and EURATEX by the Phare Program of EU "A program for business support".

Second Business Forum: Investment in the Environment for a Better Quality of Life will be held on 8-9 June 2004.

On June, 23 and 24 2004, at Albena resort, Dobruja hotel are going to take place two seminars for the branch and regional associations, members of BIA, on the topics "Healthy and safe labor conditions" and "Home market, regional politics and structural funds". The two forums are organized by BIA, the Movement of the French enterprises (MEDEF) and the Federation of the Greek industry (SEV), in the framework of the PHARE Program project - A Program for business support (2) - BOSMIP.

Europe

Nokia has seen a sharp rebound in sales of its mobile phones in Europe in recent weeks, in a strong sign that handset price cuts and the introduction of new models have reversed earlier falls. In April, the world's leading maker of mobile phones cut the prices of some of its handsets by almost 25 per cent following the loss of global market share to rivals such as Samsung, Sony Ericsson and Siemens. Nokia had suffered because rivals including Siemens were selling cheaper entry-level handsets and because it lacked a wide enough range of colour screen camera phones in the highly-competitive mid-tier price bracket. However, mobile phone retailers report that Nokia's market share in Europe has been increasing noticeably in recent weeks as it has recaptured leading positions for sales with some of its handset models.

USA

El Paso, the US energy company, expects its second-quarter gas and liquids production to be about 8.7 per cent lower than first-quarter levels.The company's shares closed down 6.7 per cent to USD 7.21 in New York on Friday after it estimated production at 823m cubic feet equivalent per day. But El Paso, which is under investigation by the US Securities and Exchange Commission for overstating its proved reserves, moved to reassure investors. It said it was "well ahead" of schedule for asset sales - it plans to sell USD 3.3bn-USD 3.9bn of assets by the end of 2005 - and that first-quarter cashflow was higher than expected, which further accelerated debt reduction. El Paso said it had lowered net debt by about USD 2.4bn between September 30 2003 and March 31 2004. The company said it expected net debt to be about USD 17bn at the end of 2004 as about USD 1.9bn of previously announced asset sales were expected to close by then.

Asia

China Eastern Airlines Corp., the nation's third-largest airline, plans to buy 10 Airbus SAS A330 jetliners, valued at as much as УСД 1.3 billion, and is considering an order for Boeing Co.'s proposed 7E7 plane.``Our preliminary plan is to buy 10 Airbus planes, but we need approval from the government,'' Li Fenghua, president of Shanghai-based China Eastern, said in a telephone interview. ``We are considering the 7E7, but we have till 2008 before the plane is ready.'' Boeing and Airbus are targeting different markets for new models, with Chicago-based Boeing offering the 200-300 seat 7E7, and its European rival seeking orders for the 550-seat A380, which will start flying in 2006. China Eastern ruled out ordering the A380 last week in favor of smaller aircraft designed for shorter flights. 

June 1 – Vratza Public Holiday

Vratza’s public holiday has been celebrated as the town’s official holiday since 1997, as a part of the traditional Botev days (May 24-June 2). The town was established in the early middle ages and was named after the picturesque defile Vratzata by the river Leva.  There are several views concerning the origin of the population in these lands in the Bronze and the Iron Age. According to the most popular one the Thracians, who were one of the most numerous Indoeuropean people in ancient times, inhabited the eastern part of the Balkan Peninsula. Several decades prior to the Ottoman invasion on the Balkan Peninsula, the Bulgarian state was divided into three kingdoms which easily fell victim to the Ottomans. It is known that in the years following the division of the Bulgarian state the town of Vratisa was part of the Turnovo kingdom and stood on its border with the Vidin kingdom. The scarce evidence testifying to the struggles of the Vratisa people against the Ottoman oppressors is largely legendary. That makes it hard to find the exact year when the Ottomans tore down the town and subjected its population to a yoke that lasted almost five centuries. The deposition of a regular Turkish army in Vratsa coincided with the arrival of a report saying that a cheta (military detachment) was being formed in Rumania and it was to make its way to Vratza. Soon after that a letter came to Vratsa, written by the immigrants D.Todorov and M.Tsvetkov, which informed the conspirators that the cheta (band) was led by Hristo Botev (one of Bulgaria’s greatest revolutionaries) and the town should rise in revolt on the day of its passing through. On 20 th May (1st June, new style) 1876 the cheta reached the Vratsa mountains and engaged in a battle with the numerous enemy. At nightfall the commanding staff held a meeting under the Kamarata Highs. Just when Hristo Botev rose to speak a shot came - Botev was mortally wounded. The days following 20 th May were days of celebration for the Turks. They drove around town the impaled heads of insurgents and members of Botev’s cheta.