Financial news

In the third quarter of 2014 production of mineral fuels for internal combustion engines (ICE) decreases YoY by 5%, but compared to the second quarter of 2013 it increased by 0.5%, shows the industry report of SFB Capital Market JSC on the development of the sector. In the first nine months of 2014 there is also a decrease - by 13.5% on an annual basis. In the third quarter of 2014 import continued to increase. YoY growth is 2.3%, as to the second quarter - 2.7% and for the first nine months of the year - 1.9%. Export in Q3'2014 is significantly lower compared to the same period of 2013 - by 25.3%. As to the second quarter of 2014 the decline is 14.8%, and for January-September period - by 24.6% YoY. Estimates for the third quarter of 2014 show that the quantities of mineral fuels for domestic sales in Bulgaria are up by 21% YoY, and for the nine months period - by 5.9%. For more information and orders: http://sfb.bia-bg.com

The share of Bulgaria’s state debt increased to 23.1% of GDP in November 2014 as a result of the securities issued on the domestic market. This share decreased to 22.8% in October as a result of the reduction of Bulgarian internal debt. Bulgaria’s national debt amounts to EUR 9.598 billion, the Ministry of Finance reports. The foreign debt amounts to EUR 5.58 billion, while the internal debt amounts to EUR 22.24 million. The foreign debt share remains unchanged at 13.4%, while the share of the internal debt increased to 9.7% compared to 9.4% in October. In the last month of 2014, the Ministry of Finance issued government securities worth EUR 800 million. In addition, it took out a loan worth EUR 1.5 billion from four banks in order to pay guaranteed deposits in closed Corporate Commercial Bank.

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

Companies

Bulgaria’s government is to approve today changes to the Law on Electronic Communications envisaging a fine of up to BGN 2 mln for mobile operators who fail to abide by the European Union regulations on wholesale and retail price caps for roaming charges. The legal amendments are to be discussed on Wednesday during the first sitting of the government for 2015. Under the bill, the minimum penalty in the case of failure to observe the rules on wholesale price caps for roaming charges will amount to BGN 400 000, while the smallest fine in the case of a retail price cap breach will be BGN 50 000. Besides, mobile operators will face fines of BGN 10 000 – 100 000 in the case of a breach of their obligation to inform consumers about their rights when using a roaming service.

Real estate company FairPlay Properties put an end to the procedure for reverse split, which will give investors the opportunity to get dividends from its future profits. In the last few years this was hard due to accumulated losses from revaluation of properties. In that way though the company registered operative profit it came at net loss, which made its equity capital smaller than its fixed capital which is a detriment to pay dividend to investors according to Commercial law. As far as investors that include pension funds, mutual funds, as well as many individuals are concerned, the change does not carry negative accounting effects. Investors approved of the unusual procedure during the summer and thus its results have already been registered in the Commercial Register. In 2013 FairPlay Properties reported BGN 53.8 million equity capital, which was lower than its fixed capital that is to the amount of BGN 55.8 million.

KCM was honored with the award "For introduction of innovations in safety" at the end of 2014, the company announced. The prize is awarded by the Bulgarian Association "Labour, Health, Safety." "This award is the result of efforts of all staff of the company - employees, engineering staff, operational and senior management team and the good interaction and teamwork between and Safety and Health at Work Authority and Occupational Health Service", KCM commented.

Businessman Grisha Ganchev will be tried as the leader of an organized criminal group set up to commit tax fraud. This is one of the charges in the indictment against him, the Specialized Prosecution Office said. The criminal group led by the Lovech-based businessman was set up to evade the ascertainment and payment of large amounts of value added tax. The 200-page indictment concerns the group's activity between January 1, 2012 and May 15, 2012. Ganchev's son Danail, Emilia Stanoeva and Milko Dimitrov are indicted as accomplices. They did not issue invoices in an attempt to evade the payment of 711,580 leva in value added tax owed by Litex Commerce JSC - a company with many lines of business, including the car industry, sugar trade, fuels trade, energy, transport and tourism. Grisha Ganchev is also charged with threatening to murder Krassimir Stefanov, the National Revenue Agency's director in 2012. Eight persons are charged with involvement in a criminal group and tax offences.

The number of insolvent companies in Bulgaria has been decreasing after the boom in 2013, data by the Registry Agency showed. The number of insolvent companies decreased by 37%, while insolvency proceedings that were opened decreased by 32%. However, bankruptcies and sales are expected because of the problems in Corporate Commercial Bank.

Europe

Activity in the euro zone service sector improved slightly in December after a slowdown in the previous month, although the reading missed forecast. The services PMI in the euro area ticked up to 51.6 in December, compared with November's final reading of 51.1, Markit Economics showed on Tuesday. The reading fell short of analysts' predictions of 51.9 and preliminary data. The composite index also rose to 51.6 in the reported period after a 51.1 reading in November. Analysts had expected the reading to increase to 51.9. Commenting on the report, Chris Williamson, chief economist at Markit, stated that "the euro zone economy ended 2014 with its worst quarter for over a year. There’s some relief in that the rate of growth picked up slightly in December, rather than easing further, but the PMI reading was still the second-lowest seen for 17 months, highlighting another disappointing lackluster performance. GDP looks set to rise by a mere 0.1% in the fourth quarter.

America

Whether US housing markets continue to recover or not remains a topic for debate – with contradictory statistics coming up every now and then. But one thing is for sure: sales of expensive homes are on a roll. Sales of homes worth $1 million or more went up by 9% in the third quarter last year from the same period in 2013, while the overall market is not responding well to the booming economy, with total sales slipping by 1.2%. “Million-dollar-home sales will continue to be strong for the remainder of 2014 and into next year, but those sales, at just under 3% of the market, will have a limited impact on overall sales growth in 2015,” a Redfin survey concluded. A million dollars will still buy what’s considered a luxury home in most parts of the country, but there are places where this price point will buy nothing more than the average home, according to the Redfin survey. Several pricey California cities were at the top million-dollar-home sales list in the third quarter. A couple of cities that are considered affordable, including Chicago and Housto,n also made the list.

Asia

China's services sector grew at its fastest pace in three months in December as new orders remained strong, a private survey showed, an encouraging sign of strength even as manufacturing activity slows and the property market softens. The HSBC/Markit Services Purchasing Managers' Index(PMI) picked up to 53.4 last month from November's 53.0, well above the 50-point level that separates growth from contraction in activity on a monthly basis. A sub-index measuring new business eased slightly to 53.9 in December from a 2-1/2 year high of 54.2 in November but remained well in expansion territory, prompting companies to hire more workers for the 16th month in a row. After a rough 2014, the world's second-largest economy looks set to start the new year on a weak note, reinforcing expectations that Beijing will roll out more stimulus to avert a sharper slowdown which could trigger job losses and debt defaults.

St. John The Baptist Feast

On January 7, the Bulgarian orthodox church celebrates the day of St. John the Baptist – the last prophet of the Old Testament and Baptist of Jesus Christ. The feast is also called “Ivanovden”. John the Baptist is also called “The Precursor”, for he was walking before Jesus and prepared the people for his birth. His sermon calling for repentance and baptism, for cleaning of all sins as a preparation for the coming of Jesus gives him a special place among all Evangelists. He was fighting for high morality and justice, and was sentenced by the ruler Irod Antipa. Later on, he was beheaded following the ruler’s order. In Bulgarian national tradition, Ivanovden is connected with the purifying power of the water, sanctified the previous day. The period of the so-called “dirty days” is over and everyone turns their sights forward waiting for the prophecies for good health, rich harvest and happy life to come true. On this day, everyone called Joan, Joanna, Ivan, Ivana, John, Ivaylo, Jean, Jeaneta, Yovko, Yovcho, Johan, celebrate their name day.

On that day:  The village of Lyutibrod Stoyan Mihailovski