Financial news

 Bulgaria’s 42nd National Assembly voted  (119 votes in favour and 98 against) the socialist-nominated Plamen Oresharski cabinet into power on May 29 2013. The structure and members of the Cabinet voted into office on May 29 consists of:
Plamen Oresharski- Prime Minister, Zinaida Zlatanova- Deputy Prime Minister and Justice Minister, Petar Chobanov-Finance, Dragomir Stoynev-Economy and Energy, Daniel Papazov-Transport , Dimitar Grekov-Agriculture, Petar Stoyanovich-Culture, Tanya Andreeva-Health, Tsvetlin Yovchev-Interior, Angel Naidenov-Defence, Kristian Vigenin-Foreign Affairs, Iskra Mihailova-Environment, Mariyana Georgieva-Youth and Sport, Anelia Klisarova-Education and Science, Hasan Ademov-Labour and Social Policy, Ivan Danov-Investment Planning, Desislava Terzieva-Regional Development

In April, the share of bad and restructured credits in the Bulgarian banking system has increased once again following a particular period of decline. Their share from the total of loans issued to business and households (overdrafts excluded) surged by 0.7% to 23.2%. The rise is mainly due to the problematic debts of companies (in the non-financial sector) that gained 25.5% to BGN 9.86 billion. In April, the volume of corporate credits increased by 0.3% on a monthly basis to BGN 34.99 billion, while household loans rose by 0.2% to BGN 18.53 billion. In end-April, corporate deposits amounted to BGN 13.976 billion, gaining 1.9% on an annual basis, while household deposits stood at BGN 35.323 billion, adding 10.9% compared to April 2012. The deposits of financial companies dropped by 17.8% on an annual basis to BGN 3.547 billion in end-April.

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

Privatization

The Bulgarian government will likely stop the privatization deal for the freight unit of the Bulgarian State Railways Company, the country’s newly appointed Transport Minister said. Transport Minister Danail Papazov told reporters that hundreds of jobs would be lost if the deal goes through. However, the new Minister pointed out that no conclusive decision hasn’t been made yet, adding that the situation should be thoroughly analyzed.

Companies

Bulgarian Development bank negotiated a EUR 10 million credit line by the Hungarian Eksimbank. Funds by the line will be used for financing of Hunagrian projects and export of Hungarian goods in Bulgaria. They will be granted for a term of between 2 and 5 years. Companies engaged in agriculture, environment, health, energy, transport and utilities may take advantage of the funds.

Bulgarian software company Telerik will continue its partnership with Google for development of application for operating system Chrome OS. Telerik recently introduced a new version of its Icenium mobile application development suite. The updates to Icenium include a preview of the Icenium Everlive Back-end as a Service (BaaS), new user-management features, and the addition of a Kendo UI DataViz starter template for chart creation and data visualization. With the addition of the Everlive BaaS component, Icenium provides a mobile app development platform that enables the creation, building and publishing of iOS and Android applications, using JavaScript and HTML. Partnership between Google and Telerik started in the end of 2012, when the Internet giant released a new version of Chrome OS’s camera application, developed by a team of the Bulgarian company.

Duties of Heat Supply Sofia in 2012 rose nearly by 10 percent to BGN 603.97 million.The reason is mainly increase in short-term debt to Bulgargaz that has gone up from BGN 160 million in 2011 to BGN 220 million in 2012; while the longer-term debt to the gas supplier is reduced threefold - from BGN 32 million to BGN 10 million. There are changes in the way in which Heat Supply Sofia pays gas. While in 2011 the gas was prepaid two months ahead in 2012 – the procedure took place three months in advance. Heat Supply Sofia has a positive financial result, and the funds used for investment and repayment of old debts. In 2008 the company was a loss of BGN 63 million, in 2009 – BGN 100 million, while in 2012 the company was at a profit to the amount of BGN 3 million.

Mondelëz Bulgaria is the new name of the leading manufacturer of chocolates, biscuits and coffee drinks Kraft Foods Bulgaria. At a press conference the CEO Mr. Ivaylo Naydenov launched a new corporate identity of the company, a manufacturer of some of the most popular brands of snacks and beverages in the world (Milka, Svoge, Suchard, Toblerone, Oreo, Moreni, BelVita, Tuc, Barni, Jacobs , New Brazil). The change of name of the company is part of the international restructuring Kraft Foods and the division of the business into two separate companies - Mondelëz International engaged in the production and marketing of chocolates, biscuits, snacks and beverages worldwide, Kraft Foods Group is focused on the business of food products in North America. Mondelëz International is the largest producer in the world of chocolates, cookies and snacks, and the second largest producer of coffee and chewing gums. The process of introducing a new identity and reorganization of the company started on 1 October 2012, the change takes place gradually in 165 countries with offices in "Mondelëz International". The Bulgarian branch is part of the structure of Mondelëz"Central Europe, along with 17 other countries in the region. In Bulgaria the company has two manufacturing plants in Svoge and in Kostinbrod.

Austrian utility EVN plans pay an unchanged dividend this financial year, despite reiterating it expects a 40 percent drop in net profit due in part to tough regulations in Bulgaria. "We want to stick to our stable dividend policy," Chief Executive Peter Layr said, after the company reported a 38 percent fall in first-half net profit. EVN, which provides electricity, gas, drinking water and other services at home and in eastern Europe, paid a dividend of EUR 0.42  for 2011-2012. EVN warned last month its net profit would drop by around 40 percent this financial year due to problems with environmental projects in Moscow and a Vienna joint venture that has lost value, as well as the Bulgarian regulations. The Austrian company said first-half sales fell 2 percent to EUR 1.65 billion and net profit fell to 132 million, mainly due to write-downs and one-offs. But earnings before interest and tax (EBIT) fell only 2 percent to EUR 212 million.

Europe

German unemployment rose more than four times as much as economists estimated in May as the euro area’s sovereign debt crisis and a long winter took their toll on Europe’s largest economy. The number of people out of work climbed a seasonally adjusted 21,000 to 2.96 million, the Nuremberg-based Federal Labor Agency said today. That’s the fourth straight monthly gain. Economists predicted an increase of 5,000, according to the median of 35 estimates in a Bloomberg News survey. The adjusted jobless rate held at 6.9 percent, just above a two-decade low of 6.8 percent. German gross domestic product grew just 0.1 percent in the first quarter after a 0.7 percent slump in the previous three months as the 17-nation euro area, the country’s biggest export market, remained mired in recession. Still, business confidence rose this month for the first time since February and consumer confidence is set to climb to the highest since 2007 in June, according to market researcher GfK AG. “This is a clear warning that the debt crisis is finally taking its toll on the German labor market,” said Carsten Brzeski, senior economist at ING Groep NV in Brussels.

America

Latin America is disappointing investors, economists and businesses with slower-than-forecast growth as waning commodity prices and strong currencies hit nations that failed to diversify and become more competitive. The five biggest investment-grade markets in the region -- magnets for foreign capital as rich countries stalled --expanded below projections or show signs of weakness. Mexico’s and Brazil’s gross domestic product missed. Economists polled by Brazil’s central bank cut the country’s 2013 outlook this week for the second time in seven days, anticipating the worst three-year period in a decade. While cruising at twice the speed of the 1980s for the past decade, the region has reduced poverty and debt. Still, it has done too little to invest windfall revenue in roads, technology and education, and to promote businesses outside of mining and agriculture. Instead of reducing vulnerabilities to commodity boom-and-bust cycles, Brazil, Mexico, Colombia, Chile and Peru increased primary exports to an average 71.3 percent of foreign sales from 58.3 percent in the decade through 2011.

Asia

Japan's Inpex Corp and Russia's state-controlled oil company Rosneft will sign an agreement on oil and gas development, the Japanese trade ministry said, a sign recent talks on energy cooperation are bearing fruit. Japan has been scouring the world for energy supplies after the devastating Fukushima crisis in 2011 crippled its nuclear power sector. It now consumes a third of global LNG shipments, with Russia already accounting for 10 percent of its imports. The two countries have been in intense discussions on expanding energy supply agreements that could redraw the East Asia energy map. Inpex, Japan's top energy explorer, and Rosneft will agree on developing two oil fields off the Russian port of Magadan in the Okhotsk Sea. The companies will develop blocks named Magadan 2 and Magadan 3 fields with estimated reserves of around 3.4 billion barrels, the report said. The Japanese explorer will have a one-third stake in the development, it added, citing unidentified Japanese and Russian sources. Exploration surveys will start as early as 2017 and drilling is expected to start around the mid-2020s.

Kozloduy Public Holiday

The town of Kozloduy is located in the northwestern part of Bulgaria, on the shore of the Danube river. According to the first official sources, Kozloduy was first inhabited in XVI century. For hundreds of years, it was inhabited Thracians, Slavs and Bulgarians, who left rich cultural heritage. Traces of a Thracian settlement, which existed in the first millennium B.C. have been discovered in the sepulchral hills. Later on, the big Roman Danube coastal bridge passed through these places. Remains of the Roman castles Magura Piatra (or Reginaum), Kamistrum and Augusta have been found. The three historical trenches, later called Lomski, Ostrovski and Kozloduyski, are also in this region. In XVIII century, the settlement was known under the names Kotozluk and Kozludere (which means “low ravine"), and later on it was given the name Kozloduy (which means “an angle of ice"). On 17 May 1876, Hristo Botev and a group of other revolutionaries arrived in Kozloduy on the Radetzki ship. On 23 November 1877, the town was liberated from the Ottoman yoke. On 6 April 1970, the building of the first and still only nuclear power plant in Bulgaria (NPP Kozloduy) was launched.

On that day:  Saint Emilia