Financial news

Output of the Wood industry in Bulgaria reported growth in the third quarter of 2010, shows the industry report of SFB Capital Market JSC on the development of the sector. YoY increase is by 21.1%. Turnover from sales of products, goods and services in the sector increased as well - by 14% YoY. The YoY increase in import, which started in the second quarter of 2010, continued in the Q3. Compared to the same period of 2009 the increase is 4.8%. Export of the Wood industry increased on an annual basis for the fourth consecutive quarter - by 57.6% YoY. The results show that sales of board of wood, veneer sheets and sheets for plywood are higher in the third quarter of 2010 on an annual basis and throughout the first nine months. For more information and orders: http://sfb.bia-bg.com

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

Privatization

Bulgaria will launch the sale of tobacco group Bulgartabac Holding in the middle of February, while the sell-off method will be determined within the coming weeks, the country's Economy Ministry said. The privatisation scheme - a sale on the exchange, an auction or a competitive procedure - will be proposed by Citibank, which serves as advisor for the deal. "The bank has made preliminary inquiries to a hundred potential investors globally, both strategic and financial. The goal is to ensure that there is no serious investor who is not familiar with the project," the Ministry said. The Ministry expects to select a buyer for Bulgartabac by the summer.

Companies

Bulgaria's state-owned power grid operator NEK will be obliged to sell on the country's future power exchange part of the energy that will be required to purchase from renewable energy sources (RES) and from Maritsa East 1 and 3 power plants under their long-term contracts, the Economy Ministry told. Currently, the Ministry is drafting a new energy law as part of its measures to meet the requirements of the European Union's (EU) third energy package, which provide for the liberalisation of the country's electricity and gas market. The EU's requirements should be fulfilled by March 2012 at the latest, but the country needs to take measures towards their implementation by March 2011. The amendments to the energy law stipulate no restrictions to the volumes that should be traded on the energy stock exchange, but transactions that must be implemented through the bourse would be regulated by the new act to ensure its efficiency, the Ministry said.

The Bulgarian Lederbel BG has won the tender to explore for oil in the Black Sea, region of Silistar, overcoming two other Bulgarian and one US company. Lederbel has received a five-year permit for deep-sea drilling in the Silistar bloc, an area of approximately 7 000 square kilometers near the country's southern Black Sea coast. The winning company is co-owned by Krasimir Georgiev, the owner of the company Frontier and a known close friend of the former Economy and Energy Minister Rumen Ovcharov (2005-2007) from the former three-way government (2005-2009). The bid was announced in March 2010 in the Official Journal of the EU for exploration in Bulgaria's southern Black Sea sector (so-called Silistar block). The contest was initially thought to be exciting, with major companies like Total, Statoil, and Americans Anadarko expressing interest.

Russian state-owned energy company Inter RAO considers to borrow EUR 300 mln in order to buy the Bulgarian Maritsa East 3 Thermal Power Plant from the Italian Enel. The money will be borrowed from the Russian Sberbank, Gazprombank and VTB. Inter RAO plans to buy 73% of the Thermal Power Plant. However, experts have recently commented that the potential buyer is probably eying a 100% stake in the plant, in which the state owns a 27% stake. The rumors were fanned by a statement of Energy and Economy Minister Traicho Traikov, who recently announced that the state can land EUR 200 mln from the sale of its stake in the plant. US investment fund Contour Global was until recently considered the most probable buyer of for the 908 megawatt Maritsa East 3 coal-fired plant in Bulgaria, but it is facing funding problems.

Greece’s Leaf Tobacco A.Michailides (LTAM) opened on Saturday its second tobacco processing factory in southwestern Bulgaria worth 9.5 million euro, Bulgaria’s economy ministry said. The new factory in Sandanski, which has a production capacity of four to six tonnes an hour, will be carrying out preliminary processing of Bulgarian and Greek tobacco, the economy ministry said. The new factory will employ around 600 people. LTAM has invested some 4.5 million euro in its first factory in Sandanski which it opened in 1996.

Bulgarian banks will take part in evaluating projects under the Competitiveness operational programme (OP) as of 2011, Deputy Economy Minister Evgeni Angelov said. The banks will review projects by local companies seeking funds for energy efficiency schemes, which are expected to be announced in the second half of 2011, Angelov said. Before the start of accepting applications for EU financing, Bulgaria's Economy Ministry will sign a memorandum with the European Bank for Reconstruction and Development (EBRD), which will pick seven to 10 banks and also send energy efficiency experts, who will take part in the projects' assessment. The EBRD is also expected to provide credit lines to the banks that will be engaged in the administration of the energy efficiency procedure. In turn, the funds will be disbursed to local firms to start developing their projects until obtaining the EU financing.

Europe

Italy easily borrowed EUR 6.75 billion by selling bonds, with lower interest yields reflecting easing of jitters in Europe's debt crisis. Bids exceeded the amount on offer by 1.4 times for EUR 3.5 billion in three-year paper, compared with 1.39 times in December. The ratio also improved for 10-year bonds. Interest rates, meanwhile, dropped to 3.12 per cent from 3.25 per cent on three-year bonds, and to 4.73 per cent on the 10-year bonds. Unicredit bond analysts said the auction "was in line with previous Italian auctions this week and more broadly with the trend at Italian auctions." Italy continues to be considered the safest bet among the so-called periphery nations, the eurozone countries with lower growth and high debt.

America

The U.S. economy, fueled by gains in consumer spending, grew at a faster pace in the fourth quarter, raising hopes that it’s on self-sustaining path, government data showed. In its first estimate of growth for the final three months of 2010, the Commerce Department said gross domestic product rose at a 3.2% annual rate, faster than the 2.6% pace seen during the interval spanning July, August and September. Economists had expected a stronger 3.5% growth rate, however. See MarketWatch economic calendar. In an important milestone, the level of GDP in the fourth quarter exceeded its previous peak. This means that the economy has now moved from a recovery phase into an expansion phase of the business cycle For all of 2010, the economy increased 2.9%, marking the biggest annual increase since 2005.

Asia

The currency basket China uses as a gauge for setting the value of the yuan is made up of about 20 currencies, split equally between those of developed and emerging economies, China’s top central bank said. However, he didn’t specify which currencies are used or how they are weighted. China regards the composition of its currency basket as a state secret. Friday’s disclosure marks a departure from protocol established in 2005, when the central bank dropped its peg to the U.S. dollar in favor of a system that allows a crawling appreciation of the yuan from a mid-point that it sets daily. In separate remarks to state television, People’s Bank of China Gov. Zhou Xiaochuan referred to the need for ongoing reform, even as he reiterated the current policy of keeping the yuan’s exchange rate basically stable while improving the flexibility of the currency regime.

Vanga

The Bulgarian prophet and healer, known and honoured all over the world, Vanga was born on January 31, 1911 in the town of Strumica, now in Macedonia. Later her family moved to the town of Petrich. When she was 12 year old she fell into a storm and a blast took her away in the field. After a hard quest her relatives found her terrified with her eyes filled with dust and sand. No treatment helped so Vanga went blind. Her supernatural talent came gradually. It was the first time that she revealed her gift when she told her father where he could find his stolen sheep. Vanga told the astonished people she had seen all this in her sleep. She noticed what she had dreamt of later became true. Her talent was clearly expressed during the years of the war, when answering the soldier relatives’ requests she told them everything about their beloved. Soon her extraordinary gift made her popular. Local people and foreigners came to see the phenomena. Vanga did help them healing illnesses as well, not using medicines but rather herbs. According to one of Vanga’s prophecies after 200 years mankind will meet rational beings from the space. She said they have been living on the Earth for many years. Vanga died on August 11, 1996, saying that such a talent like hers was to be granted to a 10-year old girl, living in France. The world would soon hear about her.

On that day:  Regional Museum of History and Ethnography in Gotse Delchev