Financial news

The interim parliamentary committee on budget and finance approved the draft amendments to Bulgaria's Budget Act. The budget update was tabled by the Council of Ministers earlier this week. It provides for a deficit of 3.7% of Bulgaria's GDP for 2014 and the taking of another state loan of BGN 4.5 B. On Thursday it was approved by 13 members of the parliamentary committee. Five abstained and none was against. According to Finance Minister Vladislav Goranov excessive deficit and uncollected revenues was not the goal of the amendments, but they were necessary in order to cover the budget gap.

On Thursday the ad-hoc committee on budget approved the second National Health Insurance Fund (NHIF) budget update for the year with BGN 100 million. The Health Ministry has the ambition of coming up with a package of health reforms to guarantee better control and efficiency of the spending of funds in 2015. The necessary amendments will be tabled in December, the Health Minister Petar Moskov said. Next year the NHIF can rely on as much funding as it received this year following the budget update or BGN 325 million more compared to its initial budget for 2014, but no excessive spending would be allowed.

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Companies

A major Chinese agribusiness company intends to invest EUR 100 mln in the construction of an industrial park for processing agricultural produce in Bulgaria, InvestBulgaria Agency (IBA) announced. The investment intention of Tianjin State Farms Agribusiness Group has already been endorsed by Tianjin Municipal People's Government, the Bulgarian government promotion agency said in a statement summarizing presentations of investment opportunities it made to potential Chinese investors in Beijing and Shanghai last week. The idea of Tianjin State Farms Agribusiness Group is to attract another five Chinese companies to invest in the construction of new facilities for processing of agricultural production. In 2011, the Chinese agribusiness company rented about 2,000 hectares of land in northwestern Bulgaria, one of the poorest EU regions, to grow maize, alfalfa and sunflower for export to China.

Several companies were awarded 10-year licences to operate as electricity traders in Bulgaria, the Bulgarian energy regulator said. The licences allows the companies to operate as coordinators of standard balancing groups. Slovenian company Petrol projects that the amount of electricity it will buy and sell will gradually increase from 86,400 megawatt-hours (MWh) in 2014 to 104,500 MWh in 2016, and 126,500 MWh in 2018. Sofia-based company Fotoni Trade projects that the amount of electricity it will buy and sell will increase to 155,000 megawatt-hours (MWh) in 2019 from 30,000 MWh in 2014, the regulator added. Another licensed company Vaptech Power, owned by Vaptech, plans to increase the amount of traded electricity by 50% in 2015 and by 44% in 2016. In 2018, it will increase its electricity trading by 6% over the year.

Bulgarian veterinary drugs producer Biovet has been pledged as collateral for loans amounting to EUR 275 million to be drawn by its parent Huvepharma. Brothers Kiril and Georgi Domuschievi will use the money to buy up The Rohatyn Group’s 36.6% stake in Huvepharma. The list of creditors is long: Citibank London, BNP Paribas, KBC Bank, Citicorp North America, Rabobank International Antwerp, KDB Bank Europe Limited, Cibank, UniCredit Bulbank, ING Bank – Sofia branch and DSK Bank.

Bulgaria's National Electricity Company (NEK) has transerred a small amount of money to Vidachim, an official of the Vidin-based tyre maker says. Sevdalina Dimitrova, who is President of the Board of Directors at Vidachim, made the announcement, but warned the company needed "much more" than what it had received. She told the Bulgarian National Radio the sum had only been enough to purchase small amounts of coal for the thermal power plant the company also runs in the town of Vidin. The last time workers had received salaries was in September, Dimitrova added. The state-owned utility's debt to Vidachim surmounts BGN 19 mln. Vidachim CEO Tihomir Leshtarski maintains the company is already lacking money to buy coal and pay salaries and is facing closure. He insists NEK should pay a "sufficient" portion of what it owes.

Mini Marica Iztok has failed to secure the BGN 50.16 million in loans it needs to keep its investment program going. The company only received two offers – D Commerce Bank said it was ready to lend BGN 3.9 million and United Bulgarian Bank agreed to provide an overdraft of up to BGN 8 million.

Europe

Telecom equipment and services group Ericsson tempered its outlook for growth in its main market segments on Thursday and said it plans billions of Swedish crowns in cost savings that will include staff cuts. The world's biggest mobile network gear maker said it saw growth of 3-5 percent for its total market in 2013-2017, its first numerical stab at such a forecast, but also scaled back its expectations for growth in its main market segments. The Swedish company said it expected compound annual growth of 2-4 percent in the network equipment market in the period while telecom services market were seen expanding 4-6 percent and support solutions 7-9 percent. The forecast ranges for the various market segments were 1-2 percentage points lower than its previous view, released a year ago for the 2012-2016 period. Networks make up the bulk of Ericsson's business and over half of group sales, while a rapid expansion in services has over time increased its share of sales to over 40 percent.

America

Cisco Systems Inc. ’s profit fell 8.4% in its fiscal first quarter as weakness in emerging markets offset a rebound in some flagship networking products. The Silicon Valley company said it also was hurt by slower sales to a few unnamed U.S. telecommunications carriers. Cisco Chief Executive John Chambers said those companies’ investment plans may have been affected by concerns about greater regulation under net-neutrality policies being discussed in Washington. Cisco, which announced plans in August to cut 6,000 jobs, or about 8%, of its global workforce, reported that revenue that rose 1.3%. Cisco had previously projected first-quarter revenue to rise to 1%.For the quarter ending in January, Cisco projected revenue would rise between 4% and 7%, below the average analyst estimate for growth of 8%.

Asia

Chinese investment grew at its slowest pace in more than a decade in the first 10 months of the year, while factory output missed expectations, adding to pressure on authorities to adopt fresh measures to boost the economy. The data will add to fears that weak investment will lead to a sharper-than-expected deceleration in China’s overall economy. But economists say slower growth is inevitable as China shifts to a growth model in which consumption plays a larger role. The challenge for policy makers is to ensure that the investment slowdown is gradual enough to avoid a spike in unemployment and acute stress in the financial system. Fixed-asset investment grew 15.9 per cent in the year to October compared with a year earlier, the weakest pace since December 2001, dragged down by a slowdown in property investment amid a continuing decline in home sales. Factory output grew at 7.7 per cent in October, below expectations of 8.0 per cent and the second-lowest monthly reading since 2009.

Samovodska Charshiya

The Samovodska Charshiya (Samovodska market place) in Veliko Tarnovo was established in the 60s-70s of 19th century, when the city started growing westwards. Two streets were formed with craft stores, workshops and inns. One of them began from a small square now known as the Samovodski market. During the years of the National Revival here stood the grocers’, the sandal makers’, the smiths’, and other market places, as well as the Hadji David’s, Hadji Velikov’s, and Atanas Jonooglu’s inns. The cloister of the Hilender monastery also was here. Even today the inn of Hadji Nikoli raises on the street that goes westwards from the Samovodski market and used to accommodate the crafts workshops. After the Liberation (1878) this commercial part of Veliko Tarnovo kept the traditions of the Revival market place for years. It became a symbol of the craft-trade nature of the old town. Today, the crafts market place is a significant museum in Veliko Tarnovo. The construction of the complex, including the Samovodska Charshiya and the market, was a part of the programme for development of Veliko Tarnovo as a historical, cultural and tourist city. The complex includes restored and adapted houses from the Revival period and immediately after the Liberation, bearing the typical for Tarnovo features – the broken up architecture because of the sheer land. One of them is the house of the Bulgarian writer Emilian Stanev.

On that day:  “Aleko Konstantinov” House-Museum The Advent