Financial news

The Bulgarian government will funnel out around 15% of the expenses in budget 2010, or BGN 3.91 billion, to infrastructure development, fixed assets acquisitions and other long-term projects. The amount is 26% less than the budget 2009 allocation but almost the same in real terms given that revenue will come in 20% short of the budgetary target. The Cabinet of right-of-centre party GERB is pinning its hopes on European financing to bankroll infrastructure projects in 2010, planning to tap BGN 2.367 billion against BGN 3 billion this year. Maintenance costs for the state administration and the public sector, including materials, fuel, wages and subsidies, are set at BGN 21.26 billion, a 6.6% reduction on the budget 2009 target.

Russia has made a second attempt to gain control over Bulgaria's system for transportation of natural gas. Moscow has submitted information concerning the expansion of the South Stream project. The Russian party presented a detailed analysis of all possible options for the realization of South Stream project, including the one that regards the utilization of the now existing natural gas transit system, Mr. Shmatko said. Such a move will increase the capacity of the pipeline. Exactly a year ago, the Bulgarian government turned down such a proposal from Moscow and said that South Stream should use a new infrastructure. Bulgarian experts have voiced concerns that if the transit system is full of natural gas from South Stream, Bulgaria will not be able to use alternative supplies through Turkey.

Bulgaria’s foreign and economic policy priorities torn between Europe and Russia Teodora Kamenova It has been only a few months since the start of his mandate, but Prime Minister Boyko Borisov has already met with some of the most influential world leaders. As a result of the deepening economic crisis in Bulgaria, he had an extremely intense agenda to present to his colleagues: from asking for assistance and support to canceling contracts and agreements made by the previous government. What is the outcome of this new foreign policy and does it point to a solution for a number of problems that the new Bulgarian government is facing?    Full text of the analysis You may send your comments to: bic@bia-bg.com

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Privatization

The Supervisory Board of the Municipal Privatization Agency does not acknowledge the 60 new buses in Public Transport-Plovdiv for investment of Trans City. The company is owned by Angel Batakliev, by which he became the majority owner of the former municipal company last year. According to the chairwoman of the watchdog Danny Kanazireva, Trans City violates the Law on Privatization, because the payments of the lease contract for the buses are not paid by Trans City, but by Public Transport-Plovdiv. The Supervisory Board gives Trans City a 30-day period to remedy the violations. If not, the privatization contract may be dissolved.

Companies

A group of bondholders of Bulgaria’s steel behemoth Kremikovtzi have urged the government to shut down the ailing state-run plant before winding up its businesses and offloading its assets. Bondholders proposed that the asset sale should be open to all types of investors including scrap and property businesses as well as steelmakers that would buy the assets without the plant’s mountain of debt. Bondholders claim they hold bonds worth a nominal EUR 91 million, or 28% of the issuance. They have singled out liquidation as the only possible solution involving no extra costs for the state and private creditors.The rescue plan of Tsvetan Bankov calls for converting the claims into equity capital and it needs the nod of investors holding 75% of the issuance to pass.

The funds for civil servants' salaries will be frozen for the next 3 years. Till 2013 the cabinet to allot BGN 3.2 billion per year for payments in the state institutions, provides the tree-year prognosis of the ministry of finance, attached to Bulgaria's budget for 2010. The document provides salaries of civil servants to be increased only if lay offs are carried out. The idea is to bind the wages with the accomplished work. After 2009 plummet of economy by 6.3%, in 2010 is expected an additional 2% fall. In the next two years Bulgaria's economy will start an upward development. In 2011 the expected GDP is 3.8%. In 2012 the GDP will grow by 4.8% more and then Bulgaria's economy will reach the level of 2008.

Five Bulgarian IT companies have been included in the annual ranking of the international consultancy Deloitte of the 50 most dynamic IT firms in Central Europe. This is the largest number of Bulgarian firms in the Technology Fast 50 ranking of Deloitte since Bulgaria was included in the ranking in 2007. The best ranking Bulgarian IT firm in the 2009 ranking is the software company Telerik, which has achieved a growth of 2 327% over the last five years, and is placed 5th. The Bulgarian online media group Investor.BG AD is sixth with a growth of 2 130%. Universal K is the third Bulgarian participant, which is ranked 20th with a growth of 664%. Interconsult Bulgaria is 34th with a growth of 447% and HAND Ltd is ranked among the ten “rising stars” firms with a growth of 315%.

Orpheus Club Wellness will be the first company to do an IPO this year. The company will try to raise BGN 4.04 million by offering 4 million shares, despite the stagnation on the financial market. Between 21 and 24 million shares will be listed for trade, which makes a free float of at least 30%. The subscription starts on October 26 and will be considered successful even if a single share is sold.

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Europe

Swiss banking giant Credit Suisse said its net profits rose by half in the third quarter, joining a growing list of banks to record surging earnings a year after the dramatic collapse of Lehman Brothers. The bank said net profits rose to 2.4 billion Swiss francs (1.6 billion euros), up 50 percent from the second quarter. They also marked a sharp turnaround from the 1.3 billion franc loss incurred by the bank in the third quarter of 2008. Net new assets rose to 16.7 billion francs during the third quarter, compared to just 3.6 billion francs during the same period last year.

America

The Obama administration will soon order the nation's biggest bailed-out companies to drastically cut the pay packages of 175 top executives. Kenneth Feinberg, who was named the White House's pay czar in June, will demand that each of the seven largest bailout recipients lower the total compensation for their top 25 highest paid employees by 50%, on average. For the past two months, Feinberg has been reviewing pay plans at Citigroup, AIG, Bank of America, General Motors, Chrysler, GMAC and Chrysler Financial in an effort to put these firms in a position to pay back bailout money as soon as possible.

Asia

Korea National Oil Corp. agreed to buy Harvest Energy Trust for C$4.1 billion ($3.9 billion) in South Korea’s biggest overseas energy acquisition as the nation competes with China and India to secure global resources. The South Korean explorer will pay C$10.00 per unit, or about C$1.8 billion in cash, and assume C$2.3 billion of debt, Harvest, a Calgary-based oil producer and refiner, said in a statement. South Korean companies’ entry into overseas resources fields is inevitable amid the ongoing battle to secure more resources worldwide, said experts. For a resource-poor country such as Korea, it’s definitely a meaningful move.

Paleocastro

The cult complex Paleocastro is located 3 km western from Topolovgrad (Southeastern Bulgaria). A group of rocks, spread on more than a kilometer, form in their central part the fortified wall of the Thracian fortress. The rocks form a peak chain lit up by the sun in the mornings. Over 150 stone suns are carved in the Temple of the Sun, and sunbeams are cut around lots of them. The disks have a diameter of 20 to 90 cm. The Head-Sun is found here and is now kept in the Yambol District Museum of History. It was tuned eastwards and the scientists say that the place is the oldest cult center in the Thracian lands. Some of the experts take it for a human figure, while others think it is a winged disk, often found in the Eastern culture, mainly in Persia. Such a rock peaks are found in the Sakar Mountain but there in no other place with such circles carved.

On that day:  House-museum of Ivan Vazov – Sofia