Financial news

The International Monetary Fund (IMF) expects that economic growth in Bulgaria will moderate in 2015 to about 1.25%, supported by private consumption and continued EU funds absorption, the fund said on Friday. At the end of October, the IMF projected that Bulgaria's real gross domestic product (GDP) growth would speed up to 2% in 2015 from 1.4% in 2014. “This year’s 3% deficit target is achievable, but, with downside risks related to deflation and ambitious wage and health spending targets, expenditure restraint will again be critical," the fund said in a concluding statement after an IMF mission visited Bulgaria. Net exports are expected to have a neutral effect on growth, with trading partner demand likely remaining subdued, according to the fund. According to the statement, sustained disinflationary pressures could adversely affect the fiscal accounts of Bulgaria.

The consumer price index in February 2015 compared to January 2015 was 100.2%, i.e. the monthly inflation was 0.2%. The inflation rate since the beginning of the year (February 2015 compared to December 2014) has been -0.2% and the annual inflation in February 2015 compared to February 2014 was -0.5%. The annual average inflation, measured by CPI, in the last 12 months (March 2014 - February 2015) compared to the previous 12 months (March 2013 - February 2014) was -1.1%. The harmonized index of consumer prices in February 2015 compared to January 2015 was 100.1%, i.e. the monthly inflation was 0.1%. The inflation rate since the beginning of the year (February 2015 compared to December 2014) has been -0.6% and the annual inflation in February 2015 compared to February 2014 was -1.7%. The annual average inflation, measured by HICP, in the last 12 months (March 2014 - February 2015) compared to the previous 12 months (March 2013 - February 2014) was -1.7%.

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Companies

"According to the latest traditional analysis of the Bulgarian Industrial Association (BIA), intecompany indebtedness in Bulgaria amounted to BGN 171 billion in end-2013. Based on the current trends the malformations in the structure of economy that have accumulated over the past 25 years have not been tackled. Compared to 2010 the debts of production companies have grown BGN 13 billion (8.3%). Compared to 2012 the increase is BGN 3.1 billion (1.9%). In 2013 a deflation rate was marked of 1.6%. This is why the actual indebtedness is quite higher. Unlike other EU countries Bulgaria has a small government debt (18.9% of GDP in 2013). However, corporate debt is huge, keeps growing, and nears 215% of GDP. This is turning into a millstone for economy and hampering growth opportunities," Kamen Kolev, Deputy Chairperson of the BIA.

Internet giant Google has registered a subsidiary in Bulgaria, Google Bulgaria Ltd. According to Business Register data Google Bulgaria Ltd. was registered on March 10 by Google International LLC, a Delaware subsidiary of the company which is in charge of expansion. Google International LLC is cited as the sole owner of the company. The initial capital of the company is BGN 100 000, according to Bulgaria's Business Register. The chief executive of the Bulgarian subsidiary of Google is Graham Law , Finance Director for Europe, Middle East and Africa, based in Google's EMEA Head Office in Dublin. The company may joint Sofia Tech Park, the tech park that is being built on Tsarigradsko Shose Blvd in Sofia. Elitsa Panayotova, CEO of Sofia Tech Park, noted that they were hoping to announce news related to Google, stressing that t it was too early to say. Google is currently running a major part of its activity in Bulgaria from its Dublin-based head office.

Producer of ceramic tiles KAI group soon will become part of global leader in floorings’ portfolio under the name of Mohawk Industries. The American company will about EUR 195 million. Purchaser is also American investment fund under the name Advent. Mohawk has no other factories in Eastern Europe and the Bulgarian company may turn into a key one in the region. The American investment fund Advent International is present owner of mineral water Devin. The fund bought KAI Group in the end of 2007. Merger with Mohawk will give opportunity for extension of offered products, technological modernization and will increase export abroad. Expectations are that the deal will end in the second quarter of the year. KAI group is composed of two factories: Khan Asparuh, based in Isperih and Khan Omurtag, located in Shoumen. The group is supplemented by KAI ceramics-Romania, KAI-ceramics Greece and transport company Chan Asparuh transport. The greatest part of the company’s products are exported, just 30% of them are sold on the local market. Main markets are neighbourly countries, such as Romania, Serbia, Macedonia, and Greece.

The Sofia Administrative Court has discontinued the license revocation procedure against Ruse-based arms manufacturer Dunarit, but the jurisdiction is yet to announce its ruling on the case. The trial has not been included on the court’s e-register as it is classified. Dunarit, which exports 90% of its production abroad, works under NATO standards and makes profit, has been stripped of its license by economy minister Bozhidar Lukarski, following a signal from the State Agency for National Security (SANS) suggesting the ownership profile of the company was unclear. The owners of Dunarit, a manufacturer of military and engineering products, are Kemira (99.04%) and Nikkomers (0.96%). It was privatised in 2005 against BGN 2 million by Dival 59, owned by Emil Galov, and KV-Real, owned by Krasimir Iliev and Tsvetan Vasilev. The majority shareholder Kemira is registered at the same address as a Corporate Commercial Bank (CorpBank) office in Sofia, along with other companies of Vasilev, majority shareholder of the bank. The Chairperson of the Board of Directors of Dunarit Nikola Kirov takes part in the management of the Fina-S investment intermediary, also owned by Vasilev.

Bulgaria's Blagoevgrad-BT and Sofia-BT, units of cigarette maker Bulgartabac Holding, are seeking approval to take control of Sofia-based Baranco. The latter is the biggest shareholder with 49% stake in another company under the name of Yuri Gagarin. In the end of January 2015 Blagoevgrad-BT’s Board of Directors decides to move production of filters for cigarettes in Plovdiv. The holding did not formally announce the exact company in Plovdiv will assist that production process. That’s way it is highly probable that Yuri Gagarin is the company in question. Thus the Plovdiv-based company is ready to return officially to Bulgartabac Holding’s structure. The deal is not expected to affect any markets in the country because the concerned companies lack any vertical or horizontal relations. Baranco does not perform any trade operations. Blagoevgrad-BT and Sofia-BT produce and trade tobacco goods. 

Europe

Norway’s sovereign wealth fund rose 544 billion kroner ($67 billion) last year as it broadened its holdings to capture more growth in emerging and frontier markets. The Government Pension Fund Global returned 7.6 percent in 2014, its smallest gain since 2011, the Oslo-based investor said on Friday. The $860 billion fund’s stocks rose 7.9 percent and its bonds advanced 6.9 percent. Real estate investments increased 10.4 percent. The fund, the world’s biggest, has warned it expects diminished returns amid record low, and even negative, yields in key government bond markets combined with slow growth in developed markets. The fund boosted its holdings in emerging markets to 10.6 percent, adding countries such as Ghana and Mauritius. It also invested in Nigeria’s currency for the first time. “2014 was a good year for the fund, with positive results for all its asset classes,” said Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, which manages the fund.

America

The former head of Petrobras said there was no way the state-run oil company could have discovered the massive corruption scheme that is adding to Brazil's economic and political troubles. Petroleo Brasileiro SA, as Petrobras is formally known, followed all internal procedure in approving more than $30 billion a year in spending, making it impossible to overcharge on projects, ex-Chief Executive Officer Jose Sergio Gabrielli told a congressional committee in Brasilia investigating the corruption. Gabrielli has not been charged but the government has frozen his assets. "This is not about Petrobras. This is the result of actions by criminal individuals. It is a police matter," said Gabrielli, who lead the company from 2005 to 2012 when the bulk of the bribery, price-fixing and political kickback scheme took place. "All procedures were followed. There is no way we could possibly have found these problems," he said.

Asia

The UK is the first Western country to seek to become a founding member of the Asian Infrastructure Investment Bank (AIIB). It's a new international financial institution (IFI) essentially led by China and viewed as a rival to the World Bank. There are 21 Asian countries that signed up last October to set up the AIIB. That has risen to 27, with the launch expected at the end of the year. It has about $50bn in capital, which is only a fifth of what the World Bank holds and also less than the Asian Development Bank. But, it's solely focused on the huge gap in infrastructure funding unlike the other IFIs which fund everything related to development. So, why does the UK want to join? Well, it's not unusual for major economies to become a part of regional development banks. The UK is a member of the Caribbean Development Bank, for instance. But, the China-US tensions behind the AIIB make this one more of a geo-political headache that's now playing out in headlines.

The Bulgarian participation in the race for the South Pole

In 1878 in the town of Koprivshtitsa the fourth son of Ivan Dushkov – Alexander, was born. Alexander Gerov is a nephew of Naiden Gerov, famous writer of the Bulgarian national revival. He studied in the French college in Plovdiv and there alongside the other sciences falls in love with the novels of Mayne Reid and Jules Verne. At the beginning of the last century he was sent abroad to study commerce. Alexander, however, decided that the monotonous life was not for him and chose the adventure. In 1902 he participated in an expedition in the Amazon. After living in Chile, South Africa and Australia, he met Robert Scott. The English officer told him about his expedition to the South Pole and Alexander decided to participate in it. To be chosen for the only vacancy as leader of the dog team, he used the diploma in veterinary of his brother Dimitar. Therefore, in the records of the expedition he remained with his brother’s name. On November 29, 1910 the ship Terra Nova left from New Zealand to Antarctica. On January 1, 1911 it laid alongside the glacier Ross. After the building of the base camp, group of 13 people, including Gerov, went deeper into the ice continent to make a large supply camp. On January 18, 1912 Robert Scott, together with another four people, at last reached the South Pole. During this time Alexander Gerov was waiting in the latter camp. After reaching the final goal, Scott understood that the pole had been conquered one month earlier by his competitor Amundsen. On the way back the five men were overtaken by an unexpected for the season storm and met their death. Later Alexander Gerov and several other people found them. They buried them and built the tomb of Scott from two sledges. In honor of the participation in the expedition of Alexander Gerov, a small peak in Antarctica was named after him by the deputy of Robert Scott – Priestley. After the end of the expedition the Bulgarian was living in New Zealand and then in Japan, where he died in the early 30's.

On that day:  Krivus Fortress Regional Library Partenii Pavlovich – Silistra