Financial news

The crediting market is only driven by corporate credits, Bulgarian National Bank (BNB) data shows. In December the total crediting volume dropped by BGN 63 million. Crediting remains at a standstill with the main reason being individuals, who still avoid drawing new loans. In end-December the total volume of credits issued to the non-governmental sector was BGN 50.387 billion (64% of GDP) compared to BGN 50.45 billion in end-November (64.1% of GDP). The total volume of credits dropped by 8.2% YoY.

The accumulated financial imbalances from the collapse of Bulgaria's Corporate Commercial Bank will become effective in 2015 and will hinder the country's economic growth, which is expected to reach only 1.2%, Raiffeisen Research said. In June last year, Bulgaria's central bank placed Corporate Commercial Bank (Corpbank) under special supervision over risk of insolvency and appointed two conservators after it notified the central bank it had run out of liquidity and had suspended payments and all types of banking operations. A few days later another local bank, First Investment Bank, saw a bank run prompted by negative rumours. "Nevertheless, the problems in the banking system remained isolated cases and did not affect the stability of the banking sector and the currency board," Raiffeisen Research said in its Central and Eastern European Strategy report. According to the report, lending has expanded since the beginning of 2014 and is expected to rise further in the first quarter of 2015 and beyond, on the back of moderate declines in interest rates and high liquidity in the sector. Despite the large number of coalitions in Bulgaria's new government, it seems likely to stay in power for at least a year, since people and parties are currently not convinced about the benefits of new elections.

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

Companies

Within three to five years Bulgarian IT company ScaleFocus plans to hire more than 500 employees who will work in the company’s offices in Europe, us and the middle east. The first 30-40 employees will be hired in the company’s Plovdiv-based branch in the following 12 to 18 months. They will be predominantly engaged in international projects of American customers. ScaleFocus started its activity three years ago and at present has offices in three locations-Sofia, Plovdiv and London. It has a team of 180 specialists, customers in 14 countries and created first jobs in England. The company registered more than 180% growth in 2013 and expects 100% acceleration of its turnover for 2014.

Bulgarian telecommunications operator Max, formerly Max Telecom will include voice-over-LTE (VoLTE) services in its 4G LTE network after testing proved successful. Max is working with an international partner and will be able to provide roaming on VoLTE. The company has successfully demonstrated high definition voice and video services in its commercially available 4G LTE network, the first in Bulgaria. Max launched its 4G LTE mobile internet service network for mobile Internet access in Bulgaria in May last year. The service is available in Sofia, Stara Zagora, Ruse, Sliven, Bansko, Pleven, Varna, Burgas and Plovdiv, covering half of the country's urban population. The investment in the company's five-year 4G LTE rollout plan was previously assessed to EUR 75 million. Sofia-based Max Telecom launched as a WiMAX operator in 2007. The company was acquired last year by London-based private equity investor Daniel Kupsin.

Rodna Zemya Holding, linked to Chimimport, has received a nod from the Commission on Protection of Competition (CPC) to acquire part of do-it-yourself (DIY) stores operator Baumax Bulgaria. Three parties will participate in the concentration - Rodna Zemya Holding, Apostol Apostolov (chairman of Texim Bank’s supervisory board) and current Baumax Bulgaria owner Peyo Nikolov. The latter is currently in control of 99.2% of Baumax Bulgaria via his company Haedus. Back in the fall of 2014, Haedus acquired Baumax Bulgaria from its Austrian owners.

KPMG – Bulgaria lodged an appeal against the fine of a total of BGN 200,000 it received from the Commission on Public Oversight of Statutory Auditors (CPOSA). The appeal regards both the fine against the company and its two auditors in charge of Corporate Commercial Bank (CorpBank)’s reports. Until magistrates from the court of first (the regional court) and second instance rule on the case the sanction over the CorpBank case remains questionable. According to the CPOSA the audits of CorpBank were implemented with considerable flaws and inconsistencies with the requirements of International Standards on Auditing (ISA). The Bulgarian National Bank (BNB) has not undertaken any steps regarding KPMG – Bulgaria even though the auditors hired by the central bank came up with an analysis of a BGN 4 billion gap at CorpBank. KPMG – Bulgaria audits the BNB itself, as well as ten commercial banks.

Bulgaria's financial regulator said it has imposed a temporary ban on the buyout bids for cosmetics company Aroma and real estate investment trust (REIT) Aroma Real Estate by local businessman Dimitar Lukanov. The Financial Supervision Commission (FSC) did not provide reasons for its decision in a statement published on its website over the weekend. In late December Lukanov notified the FSC about his intentions to gain full control over the two companies, offering to pay BGN 0.887 for each share in Aroma he does not own and BGN 0.747 per share for Aroma Real Estate, according to notices published on the websites of the companies. Lukanov owns directly and indirectly 7,788,833 Aroma shares, equal to 50.28% of the company's capital, and 1,516,570 Aroma Real Estate shares, equal to a 48.95% stake. The ownership change is not expected to affect the two companies' operations, the according to the notices. Aroma was set up in 1991. In 2011, the company was split into Aroma Cosmetics and Aroma Real Estate.

Europe

Italy is considering setting up a state-backed "bad bank" to help clean up its banking sector, Pier Carlo Padoan said. Bad loans force lenders to set aside money to cover expected losses. They have become the main problem for Italian banks, which fared the worst in a Europe-wide health check of the sector last year. Italian banks' gross "sofferenze" -- or loans least likely ever to be repaid -- rose to 181 billion euros in November, more than double their level in 2010. Asked if the government intended to tackle the problem, Padoan replied: "Yes, we are thinking about it, we are considering introducing instruments that go under the generic name of a bad bank, but can take various forms." He did not give further details but said whatever solution was adopted would have to take account of European Union rules limiting state aid to business.

America

Microsoft is among the top technology companies that are scheduled to report their earnings reports this week. The tech giant will deliver after Monday's closing bell and may once again surprise investors with positive numbers. Per-share profit is expected to come in at 75¢ for the quarter ending December 31, compared with 78¢ per share booked in the same quarter a year earlier. Revenue is seen at $26.3 billion for the period, up from the $24.5 billion recorded in the year-ago period, with analysts expecting cloud products to drive the company's revenue higher. The software maker is well-known for delivering positive surprises - in six of the past eight quarters, Microsoft's adjusted profit exceeded Wall Street projections. On January 21 the tech giant unveiled more details of Windows 10, the latest version of its flagship operating system, which will be free during its first year for those using Windows 7 or later systems.

Asia

South Korea's Samsung Electronics Co Ltd will be the main supplier of processors powering Apple Inc's next iPhone, Maeil Business Newspaper reported on Monday, citing unidentified sources in the semiconductor industry. Samsung will be responsible for around 75 percent of the chip production for the next iPhone, the South Korean newspaper said. The newspaper did not say how much the contract is worth and what other company will be supplying Apple. Samsung will make the chips from its factory in Austin, Texas, according to the report. A Samsung spokeswoman said the company does not comment on market speculation. Apple could not be immediately reached for comment.

Lepenitsa Cave

Lepenitsa is a cave situated 13 km southwest of the town of Velingrad in the Rhodope Mountains, on the left bank of Lepenitsa River. The cave is 1525 m long, spread on three floors. The lowest one is 273 m long and an underground river passes through it. The water flows with 1600 m/h. The second floor is occupied by two lakes in dry weather, which become four when it is raining. The third floor is dry. The entrance of the cave is only a meter high, and the cave’s profile is quite inclined. This in fact has helped the cave protect its unique beauty. The cave has a very few branches, which provides the visitors the opportunity to enjoy the cave in its entire splendor. After entering the cave several halls can be seen. The floor of the first one is covered by flakes that look like shells. When the cave is lightened they refract the light in a variety of colors. Besides, there is a crater hall, a pearl hall, a small and a big temple in the cave. Here the speleologists have found seven pearls – some of the rarest natural formations that are now exposed in the National Museum of Natural History. According to Dr. Petar Beron there are four animal species in Lepenitsa that are not found in any other place in the world.

On that day:  Youth Theater Nikolay Binev