Financial news

Bulgaria's Parliament Wednesday conclusively ratified three agreements with four intermediary banks for an up to EUR 8 bln sovereign loan. The first-reading vote was 161 in favour, 50 against and 12 abstentions. On second reading, the bill was supported by 159 MPs, 48 opposed it, and 11 abstained. Contrary to their earlier statements, ABV, the MRF and the BDC supported the ratification. They explained that their conditions were met by the Finance Minister, who made a commitment that at least BGN 2 bln of the new debt will not be issued. Under the ratified agreements, signed on February 6, 2015, Citigroup Global Markets Limited, HSBC Bank Plc, Societe Generale and UniCredit Bank AG will intermediate in the implementation of Bulgaria's global medium-term note (GMTN) programme, under which the maximum nominal amount of the debt that can be assumed is EUR 8 bln, the maximum maturity is 30 years, and a maximum interest rate of 10 per cent. The programme covers a three-year period: 2015, 2016 and 2017. The purpose is to service debt payments that fall due during that period and to finance the budget deficit.

The European Commission decided on Wednesday to step up the Macroeconomic Imbalances Procedure (MIP) for Bulgaria, France and Germany, said EU Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici. He noted that until now Bulgaria was in a MIP for imbalances in a certain area, however, the procedure now needs to be stepped up. Bulgaria is experiencing excessive macroeconomic imbalances, which require decisive policy action and specific monitoring. In particular, the financial sector turbulence in 2014 has raised concerns about the existence of banking practices in the domestically-owned part, with potentially significant implications for the financial sector and overall macroeconomic stability. In addition, the still negative, albeit improving, external position, corporate overleveraging and weak labour market adjustment continue to pose macroeconomic risks and deserve close attention, Commissioner Moscovici said, recalling that the EC had warned about this last year.

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Privatization

Sofia Municipality froze the procedure for the sale of its 67% stake at Municipal Bank. The privatisation procedure was suspended in 2014 due the unsettled court disputes around the ownership of the financial institution, which were considered a risk for the eventual sale. The stocks were included to the list of the Sofia Municipal Privatisation Agency (SMPA) for 2015. The Sofia Municipal Council, however, excluded them.

Companies

Producer of metal constructions and equipment Montagengineering invested BGN 700 thousand in purchasing its own production base in 2013. At present the company is building its new production warehouse for dying of metal constructions. Investment is assessed to about BGN 500 thousand. The Stara Zagora-based company plans to buy new machines with funds under Competitiveness programme. Preliminary planned investment for change of machines is to the amount of BGN 1 million. The management’s expectations are that new machinery will increase Montagengineering’s production capacity by 30-40%. In 2015 the Stara Zagora-based company expects to take part on two new projects: construction of new facilities in the mining industry and expansion of a metallurgical plant. Montagengineering plans to expand significantly its presence abroad. To that end it is leading negotiations with the Chinese company CBMI construction for realization of a joint project in Belgium in the sphere of cement industry.

Mtel plans to invest more than BGN 150 million for development and optimization of its network in 2015. The company intends to allocate their resources and development of products and services offered to customers, said Pertal Horst, chief technology officer in the telecom. He reminded that for the past 10 years the company has invested more than BGN 1.7 billion (2005 to 2014). Only in 2014 the amount of the investments exceed BGN 200 million. “The company is working on until early April to complete the modernization of its mobile network,” said the technical director of Mtel. He recalled that this process started several years ago and by now all the Mtel 3G network is upgraded. Yet this happened with 2G network. Modernization seeks to build the so called Single access network (single RAN), in which the same base station can serve a variety of technologies – 2G, 3G and 4G. Thus, the network is ready for easy introduction of LTE, which is expected over the next three years.

Bulgaria's Mini Maritza Iztok has awarded a BGN 2.4 million contract for delivery of medium-voltage cables to local company Tilkom, a notice in the European Union’s procurement journal indicated. A total of five offers were submitted in the tender. The value of the contract does not include value added tax. The state-owned mining complex is located in southern Bulgaria.

On the 24th of February 2015 the first dig, with which FairPlay Properties REIT starts construction of a residential complex in Sofia, Malinova dolina location, was made. The complex will be construction in immediate proximity to National Sports Academy’s playgrounds. Realization of the project starts with construction of the first of a total of three buildings. Total built-up area of the first residential building is 4 531 square meters. The investment project envisages that the building will have single underground and eight over ground levels. 38 apartments of different size will be built. Each premise in the new building will dispose with its own parking lot. The first building is expected to be completely finished by September 2016. “For now FairPlay Properties REIT plans gradual construction and sale of two neighborly residential complexes in Malinova dolina location with a total gross floor area of nearly 30 thousand square meters, equally divided between them”- company’s CEO Manyu Moravenov noted.

Europe

The College of Commissioners adopted its strategy on the Energy Union on Wednesday, which focuses on achievement of sustainable energy union and forward-looking policy on climate change. Vice-President responsible for the Energy Union Maros Sefcovic and Commissioner for Climate Action and Energy Miguel Arias Canete presented the strategy. European Commission President Jean-Claude Juncker said that energy has been excluded from the Union's fundamental freedoms, which necessitated the completion of a single energy market. Commissioner Sefcovic identified the energy union as the “most ambitious European energy project since the Coal and Steel Community”. The strategy includes a solidarity clause, which aims at reducing the dependence on single suppliers and greater reliance on neighbours, especially when faced with energy supply disruptions. The clause also calls for greater transparency when EU member states negotiate energy deals with third countries.

America

J.P. Morgan Chase & Co. is preparing to charge large institutional customers for some deposits, citing new rules that make holding money for the clients too costly, according to a memo reviewed by The Wall Street Journal and people familiar with the plan. The largest U.S. bank by assets is aiming to reduce the affected deposits by billions of dollars, with a focus on bringing the number down this year, these people said. The move is the latest in a series of steps large global banks have been discussing in recent months to discourage certain deposits due to new regulations and low interest rates. J.P. Morgan’s JPM, +0.50% steps are among the most detailed and widespread. Specifics are likely to be unveiled Tuesday by J.P. Morgan executives at the bank’s annual strategy outlook with investors, these people said. Among other points, the bank is expected to stress alternatives customers affected by the deposit moves can use for their excess cash.

Asia

Postal Savings Bank of China (PSBC), the country’s sixth largest lender by assets, is seeking an initial public offering in 2016 that could tie Alibaba Group Holding Ltd.’s record for history’s biggest, state media reported Wednesday. The bank, currently owned outright by national postal-service provider China Post Group Corp., has received a green light for its IPO from the Ministry of Finance, China Daily quoted an anonymous source as saying. The offering would seek to raise up to $25 billion, an amount which if secured, would tie Alibaba’s BABA, +0.64% New York IPO last year as the largest ever worldwide. PSBC also plans to bring in strategic investors by the end of this June to raise $6 billion through the sale of about 15% of total equity, the report said. However, the report didn’t indicate on which stock market PSBC would list. Earlier this week, the Financial Times reported that PSBC had engaged in talks with a group of potential investors for the pre-IPO minority-stake sale.

Sarafska House /Arie’s Home/

The Arie family is one of the most popular Jewish families in Bulgaria. Especially the family who lived in Samokov has their incredible history. They are sefardic Jews coming from Wien and they settled in Samokov in 1793. The story of Arie family is colorfully and widely connected to the life in Samokov during the ХІХ c. During that time the city was separated into several neighborhoods – Bulgarian, Turkish, Jewish and Gypsies’s, so it is considered that the city had a gravitation effect over settlers. The wealthy Jewish family Arie built a few houses in the city of Samokov and also the city Synagogue. The so-called Big Sarafska House that had a big hall is unfortunately not preserved. The house had a balcony with beautiful woodcarvings where the orchestra sat while some picturesque landscapes of exotic beaches with palm trees and drawings of distant cities were adorning the house walls. Out of the other four houses built by the Arie family during the ХІХ century’s 50s and 60s only one is still preserved and now it is called the Sarafska House. It is believed that like this one the other houses also had big yards with small waterfalls, flower-beds and glazed verandahs used also as winter-gardens. The Sarafska House is now opened to visitors as a museum. Just in front of it is the Synagogue.

On that day:  Eirene