Financial news

Bulgarian PM Boyko Borisov, his Romanian counterpart, Victor Ponta, and EU Regional Policy Commissioner Johannes Hahn will be the first to officially walk through the currently finalized Danube Bridge 2. The final section of the bridge was finished last week and the entire construction between the Bulgarian and the Romanian Danube shores is now connected. The infrastructure was completed at the end of August. The only finishing touches left are the hydro-isolation and the asphalt cover, which are expected to conclude by the end of the year, pending weather conditions. If temperatures fall, the works will be postponed for the spring. The Spanish contractor FCC informs that in order to do the above two, temperatures must be higher than 5C. The budget for the entire project is EUR 225 145 000, while the Bulgarian State participates with EUR 60 100 000 and Romania with EUR 48 M.

The average weighted annual yield on Bulgaria's ten-year Treasury notes fell to 2.02%. The T-notes, which were issued in the beginning of 2008, mature on January 16, 2018. At this year's first reopening of the issue in April, the average weighted annual yield stood at 4.12%, while at the auction in July it fell to 3.49%, the ministry said in a statement. The finance ministry sold a total of BGN 45 million worth of government securities on Monday with 53% purchased by banks. Dealers placed bids for BGN 124.95 million worth of debt paper, the Bulgarian central bank, which auctions government securities on behalf of the finance ministry. The average weighted price of the approved bids was BGN  112.31 per  BGN 100.0 of par value. The maximum annual yield was 2.04% and the minimum was 1.95%.

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Companies

The potential of malls in Bulgaria's capital Sofia has drawn in British department store group Debenhams. Debenhams, which has been increasing sales at home despite a recession there, will enter Bulgaria's market with the opening of Bulgaria Mall, scheduled for December 1. Debenhams, Britain's No. 2 department store group by sales behind John Lewis, has about 170 domestic stores and franchises in 27 countries including India and China. The entrance to the Sofia mall, which will house Debenhams, is located at the exit of the underpass at the intersection of boulevard "Bulgaria" and "Todor Kableshkov". The mall's investors say they want to give the appearance of this building as a center for medium to high end fashion, distinguishing it from the "everything for everyone" offer that prevails in larger projects. Instead of turning in a circle on passages from the main entrance, the visitors will find themselves in a central square with a direct look at all the stores in the four floors.

Bids for the sale of 33% stakes in Energo-Pro’s two electricity distribution companies start on Monday. The stock exchange price of shares of the two companies is lower than the price offered in the bids. Shares of CEZ Distribution Bulgaria will be offered at the Bulgarian Stock Exchange at a minimum price of BGN 1,415 per share, while shares of CEZ Electro will be offered at a minimum price of BGN 8,660. The bid will start on October 29. The government had planned to sell its minority shares in the electricity distribution companies a few years ago. It sold its majority packages of 67% each several years ago. The two companies provide services to Western Bulgaria and are the biggest electricity distribution companies in Bulgaria. Their profit decreased last year in spite of their growing revenues. CEZ Distribution has a positive result of nearly BGN 14 million and assets of BGN 720 million. Assets of CEZ Electro amount to BGN 218 million, while its profit for 2011 stands at BGN 2.4 million. The investment intermediary of CEZ' public offering is the Central Cooperative Bank.

National Electricity Company (NEK) wants to sell 325 megawatts of electricity for export in November. According to the report the electricity is for export to Greece, Serbia, Romania and Republic of Macedonia. NEK will negotiate with each candidate separately. The primary evaluation criterion was the highest offered price. NEK also reminded that prior the price is taken into account the prices for access and transmission, as well as any additional fees set by the energy regulator. These are additives for green and high-efficiency energy, as well as the additive for irrecoverable costs included in the price for transmission and are paid by all users. Together these charges burden the cost by EUR 17.50 per megawatt hour, to which is added the charge for commercial transfer rights, which vary from EUR 5.34 to 9.52 per megawatt hour. It is these charges that making the interest in auctions organized by NEK too low, said the chairman of the Association of Electricity in Bulgaria Vladimir Dichev.

 The buidling, situated in Veliko Turnovo’s center, known as Sky center is already property of First investment bank. The title deed has a date of October 11th 2012. It is for transfer of property’s ownership instead of for money debt to the amount of BGN 11 million. This is the sum that Capital Investment owes to the bank. First investment bank is to get the building, as well as other extras around it, so that the huge debt is paid fully. The indebted company’s exectuive director solves his financial problems in that way, as he has a debt to the amount of EUR 5 million to FIB. It is taken in the form of a mortgage on the building, situated at 32 Tsnako Tserkovski Street. The bank is to pay money back to other companies such as Pirgos plast, atlas, SJ Correct,etc. It takes 23 properties around the land. Tax’assessment of the property for sale is BGN 5.9 million. Despite this, the deal is struck for BGN 11 million, as Capital investment owes around BGN 2 million VAT on the property to the Revenue agency. 

Europe

Spain’s economy contracted for a fifth quarter, adding pressure on Premier Mariano Rajoy to seek more European aid even as the euro area’s fourth-largest economy met a bill-sales target. Gross domestic product fell 0.4 percent in the three months through September from the previous quarter, matching the contraction of the second quarter, the Bank of Spain said in an estimate in its monthly bulletin released in Madrid today. That compares with a median forecast for a 0.7 percent contraction in a Bloomberg News survey of 10 economists. Spain’s bonds have declined since European Union leaders last week failed to discuss further aid for the nation at a Brussels summit. Rajoy has struggled to trim a 2011 budget deficit that was more than three times the EU limit, after the country’s deepening recession pushed the jobless rate over 25 percent, sapping demand and tax revenue. Spain’s economy probably contracted 1.7 percent in the third quarter from a year ago, as job losses continued, households ate into their savings and low disposable income reduced their ability to pay down debt, the Bank of Spain said.

America

Xerox Corp.'s third-quarter profit shrank 12% as sales from the printing and services company's technology segment continued to wane. The company again lowered its earnings expectations for the year, and now predicts $1.07 to $1.09 a share in adjusted profit, from its previous estimate of $1.07 to $1.12. It added that it expected to take a restructuring charge of $50 million to $100 million in the fourth quarter, but until the plans are finalized, the guidance excludes this charge. Xerox, long known as a maker of printers and copiers, recently has struggled with weak economic conditions, especially in Europe, which have hurt the company's equipment sales. This month, Moody's Investors Service lowered its outlook on the company, saying it would take longer than expected for Xerox to improve its financial picture amid a challenging economy. Xerox has been working to transform itself into a service-focused company. It passed a milestone in the first quarter as revenue growth from service offerings pushed the segment to more than half of Xerox's top line. But, at the same time, the cost of bulking up Xerox's services business has pressured its margins.

Asia

A group of South Korean lawmakers visited an isolated set of islands at the centre of a territorial dispute with Japan -- prompting an immediate protest from Tokyo. Seventeen members of the parliamentary National Defence Committee flew to the Dokdo islands (known as Takeshima in Japan) on military helicopters for a day-long visit, an aide to committee member Han Ki-Ho said. The trip -- described as a government inspection session -- was aimed at checking security measures around the islands which are guarded by the South's coastguard, the aide told AFP. A picture released by the committee showed the lawmakers shouting slogans with a placard reading "Dokdo is our land. We will defend it". Japanese Chief Cabinet Secretary Osamu Fujimura, who on Monday had urged the Seoul MPs to cancel their trip, said it was "extremely regrettable" that his call had gone unheeded. "We strongly protest it and we are urging South Korea to prevent future incidents," Fujimura told a regular media briefing Tuesday in Tokyo.

United Nations Day

The United Nations (UN) officially came into existence on October 24 1945, when the United Nations Charter on International Organization was ratified by the member-countries – China, the Soviet Union, the United States of America, Great Britain and France. The main purpose of the Organization was to oppose aggression, to establish friendship between the nations and to maintain peace and security on Earth. Bulgaria became a full-right member of UN on 14 December 1955, together with Albania, Hungary, Romania, Austria, Jordan, Ireland, Spain, Italy, Cambodia, Laos, Libya, Nepal, Portugal, Finland and Ceylon. Our country was involved actively in a serious of peace operations of UN – 1992-1993 – in Cambodia; 1995-1999 – in Angola; 1995-2000 – in Tadjikistan; 2000-2004 – in Ethiopia/Eriteria; since 1997 – in Bosnia and Herzigovina; since 2000 – in Kosovo; since 2000 – in Afghanistan; since 2004 – in Liberia.

On that day:  Bayuvi Dupki – Djindjiritsa Reserve