Financial news

The European Central Bank (ECB) voiced its concern about the rising prices of agricultural products which will boost inflation. The capability of the agriculture sector to meet global demand is also questionable, shows the financial institution’s January bulletin. The prices of inputs for the production of foods increased considerably in 2010, ECB pointed out. As a whole, rising demand in emerging market economies led to the price increase. Household incomes improve and diet habits in these countries change, shifting towards a greater focus on meat, dairy products and fish, the bulletin read. Another structural factor contributing to the increase in the prices of sugar and maize is their use as a key component in biofuels. In the current situation, the response of producers is “slow”, the ECB concluded, explaining this with the stagnation in agricultural technology over the last 20 years. Inflationary pressures are likely to remain strong for a long time, ECB forecast, citing strong global demand and the uncertainty about the capacity of producers to meet this demand.

"Bulgaria's ruling party GERB is preparing legislative amendments, which will make it possible for the government to change direct taxes levied on physical and legal persons only if the nation votes yes in a referendum," Simeon Djankov said. Financial discipline is not a goal in itself Djankov commented, this is a means for guaranteeing economic stability of the country and the trust of our European partners to the sustainable development of Bulgaria. The percentage of GDP, which may be used for public expenses, will also be fixed by a law, which is now in the pipeline.The government also plans legislative changes, which will deal with the amount of the budget deficit and the threshold it should not exceed as a percentage of the gross domestic product, the minister said. Bulgaria's budget deficit will total BG 2.76 B or 3.9% of gross domestic product at the end of the year, beating the government's target of 4.6%, the minister pointed out.

	Mineral Fuels, Tailoring Products, Canning, Perfumery and Cosmetics, Furniture, Meat Products, Wine, Wood-processing Industry

Companies

Investment funds of Citigroup, managed by Citi venture Capital International (CVCI), have acquired 37% of Bulgarian drug maker Huvepharma for 75 million euro. The deal values the company at EUR 200 million, which lines it up among the top five acquisitions for 2010 in Bulgaria. The controlling stake in the company of 80% before the deal was held by Advance Properties Ltd. and the remaining 20% by Europe Park Development JSC. Money from the capital raise - about BGN 55 million will go directly into Huvepharma and the other nearly BGN 92 million to the treasury of Advance Properties and Europe Park Development.

Bulgarian paper mill Kostenets HHI will seek a 10 million euro loan from local Corporate Commercial Bank, the company said on Thursday. Kostenets HHI will use the loan to repay its debt and for working capital, the company said in a statement filed with the Bulgarian Stock exchange. The loan will be extended for a period of four years and will carry an annual interest rate of 8.0%, Kostenets HHI said, adding that it will use real estate and other assets as loan collateral. The company’s shareholders will vote to give rights to its management board to contract the loan at an extraordinary shareholders meeting scheduled for March 3.

Toshiba and Tokyo Electric Power will team up with the Japanese government to build one of the world's largest solar power stations in Bulgaria. The plant will be built in the eastern city of Yambol by March 2012 at a cost of more than 100 billion yen (USD 1.2 billion). As a European Union member, Bulgaria needs quickly to bolster its sources of renewable energy to reduce carbon dioxide emissions. The EU has an aggressive goal to unilaterally cut carbon emissions by 20 percent by 2020, as compared to a benchmark year of 1990. By tapping Japanese technology, Bulgaria aims to pave the way for obtaining 16 percent of its power from renewable energy sources by 2020, up from roughly seven percent now. Toshiba, Tokyo Electric, Japanese trader Itochu and the government-backed Innovation Network Corp. of Japan will set up a local joint venture, investing a total of around 50 billion yen.

“The domestic capital market was lagging behind the strong international developments in 2009 and 2010 but this year the prices of Bulgarian securities will catch up with global trends, Peter Peshev, a broker at Bull Trend Brokerage, said. He expects the capital markets of Central and Eastern Europe, to which the Bulgarian market belongs, to enjoy strong investors interest in 2011. “Emerging markets will be the hit on the global horizon of stock and commodities markets,” said Peshev. Karoll Capital Management is also optimistic. According to its forecast, the medium-term outlook is for an increase in the turnover of the Bulgarian Stock Exchange (BSE) and a strong growth of SOFIX this year. A clear signal that the trend on the BSE has really changed would be if the SOFIX index reports growth of more than 400 points. Emerging markets in Asia, Latin America and Eastern Europe will continue to dominate over the developed markets of Western Europe and the U.S., registering significantly higher growth rates.

A dramatic surge in bankruptcies of companies and a wave of insolvency cases has flooded courts throughout the country. The figures clearly indicate a double-digit growth in new cases. The increase in the number of cases in smaller towns is 20%, while in Sofia and Varna it is three times higher - over 60%. In 2010, in the capital, declared insolvent companies, by request on the part of creditors, were up by 30% year-on-year. Declared insolvent companies, by request on the part of debtors increased by 40%, reported officials from Sofia City Court. At the beginning of 2011, growth has further accelerated to reach 70%, experts pointed out. According to Georgi Dichev, Chairman of the Chamber of Private Enforcement Agents (CPEA), the peak in new cases is not expected to be over in 2011. In the first six months of 2010 alone, CPEA recorded a total of 65,000 new cases, compared to 110,000 in 2009 and the collected amount stood at BGN 260 mln, compared to BGN 365 mln in 2009.

Bulgarian companies have sold among each other nearly four million carbon quotas since the abrogation of the country's accreditation for international trade in greenhouse emissions, Vanya Grigorova, head of the executive agency of Bulgaria's environment ministry said. The agency administers the national online registry of quota transactions, which was barred from transferring emissions to the registries of European Union members in July. By comparison, over 9.5 million quotas were sold abroad when between May and June 2010 when the country was given a temporary access to European trade. Bulgaria was stripped of its accreditation in mid-2010 when it was discovered that it has no adequate system of calculating its annual greenhouse gas emissions.

Europe

Greece and euro zone paymaster Germany tried to fend off talk that Athens needed help with debt repayments via a buyback with European funding that could face stiff opposition in national parliaments. A German paper said euro zone nations were mulling a plan to enable Greece and Ireland to write off some of their debt burden using the European Financial Stability Facility, set up after the Greek bailout as a safety net for others who hit trouble. The Financial Times Deutschland said euro zone finance ministers, who met on Monday, discussed a plan for the bloc's rescue fund to buy bonds from these states or give them favourable loans for repurchasing debt. It was not clear under the plan whether bondholders would be paid the face value of the debt or not, leaving open the crucial question of whether investors faced a "haircut".

America

The United States and China reached agreement on export deals worth $45 billion including a major contract with Boeing, the White House said at the formal start of Chinese President Hu Jintao's state visit. The agreements included China's final approval of a $19 billion contract to buy 200 Boeing aircraft for delivery between 2011 and 2013, which U.S. officials estimated would support 100,000 American jobs. "We value China's support for our products and its confidence in Boeing," said Jim Albaugh, CEO of Boeing Commercial Airplanes. "With the outstanding support provided by the United States Government, this deal is a win-win for the Boeing-China partnership which is approaching its 40th anniversary. Chinese officials told the Obama administration that Chinese companies had signed 70 contracts worth $25 billion in U.S. exports from 12 states.

Asia

A Chinese firm has signed a letter of intent to invest $2 billion in a North Korean industrial zone, representing one of the largest potential investments in Kim Jong Il's authoritarian state and a challenge to U.S. policy in the region. The agreement was signed with little fanfare in Pyongyang on Dec. 20—a day otherwise marked by pitched tension on the Korean peninsula following the North's shelling of a South Korean island—according to documents viewed by the Wall Street Journal. Confirmation of the deal comes as Chinese President Hu Jintao visits Washington this week in a bid to forge closer security and economic ties with the U.S. The U.S. administration is aware of the possible Chinese investment, but officials noted that previous projects haven't gone anywhere. "No investment project will enable North Korea to meet the needs of its people as long as its government continues its destabilizing behavior," said a senior administration official.

Pomorie

Ancient Anhialo, as was known Pomorie in the remote past, was established in 6 – 5 century B.C. as a Hellenic colony. Its situation near important roads guarantees its prosperity and the propinquity of the village to a salty lake determines the development of the ancient craft – salt-production. The sea provides the charm of the other ancient craft in the region – fishery and the vine-growing remains from the worshipers of Bacchus, despite the fact it is not known whether they were local Tracians or Hellenic colonists. Survived through 25 centuries, many times burnt down and rebuilt again, the city hides in the land signs of raids of Romans, Byzantines, crusaders and Turks. The exponents from the archaeological collection are mute witnesses of the town’s millennial wild life. Unique historical and cultural monuments are the Thracian Beehive Tomb, museum Old Anhialo Salt-Mines, and churches Christ and St. Mother of God, St. Georgi Monastery and the architecture reserve Old Pomorie Houses.

On that day:  Usteto