Financial news

The Bulgarian economy will mark growth of 2.2% - 2.8% this year, according to the analyses of Eurobank EFG Group, Raiffeisen, UniCredit Bulbank and BNP Paribas, presented at the Euromoney conference. According to the expectations of the financial institutions, GDP will recover but at a slower pace than the rate envisaged by the government. The budget for next year set a 3.6 % growth. The estimates of the banking groups are closer to the expectations of the European Commission, EBRD, Fitch, the IMF and the World Bank. Experts from the Eurobank EFG group, for example, believe that growth will be in the range of 2.5% and the budget deficit will be 2.8% of GDP. Fiscal discipline will lay the groundwork for stronger economic recovery in 2011 which will pave the way for Bulgaria to join the Exchange Rate Mechanism ERM-II, stated bank representatives.

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Concessions

The Government will terminate the concession contract for the extraction of mineral water from the spring in Dolna Banya because its concessionaire Agrocommerce JSC does not fulfill its obligations. The decision is expected to be taken at today's meeting, said the government information service. One year ago the Ministry of Environment and Water announced that ten companies violated the contracts for the extraction of mineral water, among which was Agrocommerce. Inspection of the ministry showed that the company does not transfer to Dolna Banya Municipality the relevant part of the annual concession payment of 30%.

Companies

Italy's biggest utility Enel is holding talks with U.S. fund Contour Global and Russia's InterRAO to sell its Bulgarian thermal power plant, a source familiar with the matter said on Monday. "There are two negotiation tables, one is with the U.S. Contour Global, another is with Russia's InterRAO," a source said, adding that the timing for any deal is yet to be finalized. Another source, familiar with the negotiations, said Contour Global has been in talks with Enel during the past five months and expected a deal soon. Investment bank Lazard was advising Contour on the sale. Enel, Europe's most indebted utility, declined to comment. And U.S. investment fund Contour Global, which specializes in electric power and district heating businesses, was not immediately available for comment. Russia's InterRAO said in November it offered to acquire Enel's Bulgarian assets in exchange for some of InterRAO's assets in Russia.

This week a new cycle of negotiations on Belene NPP project with representatives of the Russian Rossatom Corporation is at hand, reported in a parliamentary discussion Krassimir Parvanov, CEO of the National Electrical Company. To him, the final cost of the project will be clear after all the 150 items on activities and resources concerning the nuclear power plant are discussed. Parvanov confessed that lately the NPP project cost has been increasing as a result of the constant growth of prices of metals. Bulgaria's Minister of Economy, Traycho Traykov said that negotiations on expert level with the Russian side continue. To his words, if Bulgaria's final decision would be to drop off Belene NPP, the options for constructing the eighth and seventh units of Kozloduy remain.

Power distributor CEZ plans investing EUR 40 million in a company fund for energy saving and green electricity production. The utility on 18 January clinched a voluntary agreement with the Executive Energy Efficiency Agency (EEEA), by virtue of which it will be providing green energy services until 2016, meant to cut energy costs by 9% in the designated period. EEEA said it was preparing similar agreements with EVN and E.ON. Petr Dokladal, Regional Manager of CEZ, opined that if energy consumption in the EU dropped by 20%, members states would economize EUR 160 bln, which could then be poured into new power stations and help create 1 million new jobs.

National Electricity Company (NEK) will request a 4-5% rise in electricity prices as of early July this year, executive director Krasimir Parvanov said, adding that higher prices would provide for the financial convenience of the company. NEK planned BGN 219 million in investments this year - 50% up on levels back in 2010. The electricity price hike of 1 July 2010 had already boosted NEK’s revenues by 30%, Parvanov said. In his words, utility providers CEZ, E.On and EVN would shortly follow suit in claiming higher prices as of July, though they had not yet agreed on a percentage.

Companies linked to Bulgarian businessman Vasil Bozhkov have emerged as the buyers of the stakes in Railway Infrastructure Holding Co, Holding Roads and Moststroy, sold earlier in January, according to a statement of the infrastructure firms published on Tuesday. The stakes were sold by Orlin Hadjiyankov, executive director of Moststroy and former head of the other two firms. As much as 18.5% in Holding Roads and a stake of 33.3% in Moststroy were bought by Eurobuilding 2000, which was a shareholder in the companies before the transaction. The stake in Railway Infrastructure was acquired by Urbanica Properties, another firm linked to Bozhkov. The deals were carried out on the over-the-counter (OTC) market on January 13.

Bulgaria's First Investment Bank said it has increased its stake in local health insurer Health Insurance Fund Fi Helt by 2.0 percentage points to 59.1%. First Investment Bank has acquired 100,000 shares with a par value of BGN 1.0 each from individual shareholder Radoslav Todorov Milenkov, the bank said in a statement filed with the Bulgarian Stock exchange. No Information was immediately available on the size of Milenkov's stake in Health Insurance Fund Fi Helt prior to the deal or on the price at which the shares were transacted. Following the acquisition, FIBank holds 2,955,000 ordinary bearer voting shares of the health fund with a nominal value of BGN 1.0 each.

Europe

European Union finance ministers agreed today to include targets on liquidity in new, tougher bank stress tests, but bankers remain sceptical whether tests will placate nervous investors. The tests will encompass the same 91 banks as were tested last year, but the methodology will be more stringent. It will include not only bank trading books, but also banking books and tough tests of core tier 1 capital, EU presidency sources said. The credibility of a previous round of stress tests was undermined by the failure of a raft of Irish banks shortly after they passed a Europe-wide health check. Mounting loan losses and funding difficulties in the banking sector eventually forced the Government to seek an EUR 85 billion EU-IMF bailout. EU leaders agreed on a new review of the region's banks late last year as part of efforts to win back confidence of financial markets.

America

Slumping revenues from trading fixed income products pushed Citigroup Inc fourth-quarter profit below expectations even as loan losses eased at the No. 3 U.S. bank. Citigroup released about $2.3 billion in reserves for bad loans, mainly due to an improvement in the store credit cards business it has put up for sale. But a slump in Citigroup's securities and trading unit hurt revenues, which fell 6 percent on a managed basis from the third quarter to $18.4 billion. The bank's fixed-income revenue alone dropped 58 percent from the third quarter -- compared to a 7.9 percent drop at larger rival JPMorgan Chase & Co, which reported its fourth-quarter earnings on Friday. That could unsettle investors, who had been reassured by the more moderate than expected drop at JPMorgan, ahead of other big bank earnings later this week including Goldman Sachs Group Inc on Wednesday, Morgan Stanley on Thursday and Bank of America Corp.

Asia

China has lent more money to other developing countries in the past two years than the World Bank has -- a sign of Beijing's growing economic might and thirst for natural resources. The state-owned China Development Bank and China Export-Import Bank agreed to lend at least $110 billion to governments and companies in developing countries in 2009 and 2010, the Financial Times said, citing its own research. That exceeds the record $100.3 billion handed out by the various arms of the World Bank from mid-2008 to mid-2010 in response to the global financial crisis, the report said. The newspaper said the statistics were collected by examining public announcements by the banks, the borrowers or the Chinese government. China Development Bank and China Export-Import Bank offer more favourable terms than the World Bank and other lenders for certain deals that are strongly backed by Beijing.

Simeon Radev

Simeon Radev is one of Bulgaria’s most popular publicists, diplomats and scientists. He was born on January 19, 1879 in the town of Resen (now Macedonia). He studied at the Bulgarian schools in Resen, Ohrid, and Bitola, and later graduated at the French Lyceum Galata Sarai in Istanbul. Then he studied law in Geneva. Along with his publicist activity he developed diplomat career as well. After graduation in Switzerland, he came back to Sofia. Here he wrote his most prominent book – ‘Builders of Contemporary Bulgaria’ – one of the biggest and intransient historiographic surveys for Bulgarian new history. In Sofia he also wrote the book ‘Macedonia in the Bulgarian Revival’ in French, and soon the book was translated into Bulgarian. Besides the facts of the after-liberation period of Bulgaria’s history, ‘Builders of Contemporary Bulgaria’ shows also an artistic overview of the destiny of the Bulgarian people. Simeon Radev took part in the Balkan war as an officer. He was involved in the Bulgarian mission that concluded the peace contract in Bucharest (1913), and later was included in the group of Andrei Lyapchev, which signed the Thessaloniki armistice (1918). Later Radev was Bulgaria’s diplomat in Switzerland, Belgium, the USA, and England. Simeon Radev died on February 15, 1967 in Sofia.

On that day:  Hisarlaka Fortress