Financial news

Bulgaria’s consumer price index in March 2015 compared to February 2015 was 100.4%, i.e. the monthly inflation was 0.4%, show the data of Bulgaria’s National Statistical Institute. The inflation rate since the beginning of the year (March 2015 compared to December 2014) has been 0.2% and the annual inflation in March 2015 compared to March 2014 was 0.1%. The annual average inflation, measured by CPI, in the last 12 months (April 2014 - March 2015) compared to the previous 12 months (April 2013 - March 2014) was -0.9%. The harmonized index of consumer prices in March 2015 compared to February 2015 was 100.3%, i.e. the monthly inflation was 0.3%. The inflation rate since the beginning of the year (March 2015 compared to December 2014) has been -0.3% and the annual inflation in March 2015 compared to March 2014 was -1.1%. The annual average inflation, measured by HICP, in the last 12 months (April 2014 - March 2015) compared to the previous 12 months (April 2013 - March 2014) was -1.6%.

The International Monetary Fund (IMF) revised downwards its projections for Bulgaria's 2015 real gross domestic product (GDP) growth to 1.2%. In November, the international lender said it expects Bulgaria's economy to post 2.0% growth in 2015. IMF sees the Bulgarian economy growing by 1.5% next year, it said in its Spring World Economic Outlook published on its website. Bulgaria's consumer price index (CPI) is seen dropping 1.0% this year before rising by 0.6% in 2016. The country is expected to close 2015 and 2016 with the unemployment rates of 10.9% and 10.3%, respectively. The IMF sees Bulgaria's current account balance turning to a negative 0.8% of GDP in 2016 from 0.2% of GDP this year.

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Companies

French companies express interest to invest in production in the fields of leather manufacture and sports goods in the country. After a meeting of the Minister of Economy Bozhidar Lukarski with representatives of companies, French company Recife showed readiness to invest in the acquisition of a leather factory in Bulgaria. The news was announced by the trademark owner Stephan Arnal. Recife produces luxury leather goods and accessories all over the world - covers, belts, bags, business card holders and others. The company has plants in France and Spain, and is currently viewing factory Prolet in Dimitrovgrad. Another French company Decathlon intends to seek Bulgarian partners for the production of bicycles, backpacks, sleeping bags and helmets. The company plans to open two new stores - in Burgas and Sofia.

Bulgarian coal mining complex Mini Maritsa Iztok has signed a BGN 50 million loan agreement with two banks, local media reported. The coal mining company will use the proceeds from the loan to partly cover its debts to suppliers. Under the agreement, the loan will be repaid by the state-owned Maritsa Iztok 2 thermal power plant (TPP) which in turn owes the coal mining company BGN 59.2 million. According to Mini Maritsa Iztok's executive director Andon Andonov, the Bulgarian units of US companies AES and ContourGlobal owe Mini Maritsa Iztok a total of BGN 206 million, and local power producer Brikel owes it a further BGN 47 million. AES operates the Maritsa Iztok 1 coal-fired plant in Galabovo and ContourGlobal operates the Maritsa Iztok 3 TPP. Earlier this month the two companies agreed with state-owned power utility NEK on a decrease by 14% and 17%, respectively, in the capacity price for electricity produced by their coal-fired plants in the southeast of the country.

CorpBank may enter insolvency proceedings early next week, following yesterday’s decision of the Sofia City Court (SCC). At the request of BNB, the bank’s insolvency may be antedated to September 30, 2014. The date matters since it will determine which of the cession and assignment agreements worth a combined BGN 800 million could be challenged in court. The sale of CorpBank assets could begin at least in a 1.2 years from now at the earliest. Deals, too, will take some time to complete, which means creditors will not get compensated until 2017. If the SCC launches the insolvency trial next week, what lies ahead is a long series of legal procedures, starting with the appointment of permanent assignees in the bank. Then, it will the turn of CorpBank creditors (DIF, owners of unsecured deposits, bondholders, etc.) to make their claims before the assignees in a two month’s time. The assignees will subsequently decide on which claims to fulfill and which to turn down, a process that could be appealed by the claimants in the following year.

Industrial Holding Bulgaria has successfully raised BGN 50 million on the bond market. Almost the entire bond issue was subscribed on the day of the initial public offering. The corporate bond is convertible, meaning that it could be paid out in shares of the company when its maturity date comes, thus transforming company bondholders into company shareholders. Main Capital is the leading manager of Industrial Holding Bulgaria’s bond issue, while subscription accounts are kept with Allianz Bank. Costs on the public offering are assessed at BGN 52 100. The term of the bonds is three years, while their annual interest is 5%.

Mohawk Foreign Acquisitions, a unit of US-based Mohawk Industries, has received regulatory approval to acquire Bulgarian ceramic tiles manufacturer Kai Group from investment fund Advent International. Kai Group comprises the Han Asparuh and Han Omurtag factories in the cities of Isperih and Shumen, in northeastern Bulgaria. The price of the acquisition is some EUR 195 million, as the deal includes several companies in Romania and Greece whose operations are affiliated to those of the Bulgarian group. This is the biggest transaction in the country since the beginning of the year. The deal is not expected to reflect negatively the market for production and sale of floor and wall ceramic tiles in Bulgaria and would not restrict competition therein. The deal for KAI Group has been expected though as the present owner-the American investment fund Advent had no new investment options in the country. The fund acquired the Bulgarian company back in 2007, as it kept its stake longer that the classic horizon of between four and five years probably due to the crisis.

Europe

Germany is working on a plan to keep Greece in the eurozone if the country defaults on its debt. The Financial Times reported on Monday evening that Greece is already making its own plans for a default scenario. Things are looking more and more grim for Athens: Negotiations for the country's latest bailout tranche are still going, but they're not looking good. Senior eurozone figures are suggesting there will be no deal by April 24, when the Eurogroup of eurozone finance ministers next meets. According to Die Zeit, Germany wants to keep Greece in the euro if it defaults. That would be a difficult task, and would probably require strict capital controls to stop money from flooding out of Greece. It's difficult to say when the whole situation will come to a head — HSBC suggested the Greek government's payment to the IMF on May 12 is the "crunch point" at which they won't be able to afford to go on. Even if that's managed, there are several more payments in May and June which the government can't surmount on its own.

America

The European Union accused Google of cheating competitors by distorting Internet search results in favour of its Google Shopping service and also launched an antitrust probe into its Android mobile operating system. In a statement, Competition Commissioner Margrethe Vestager said the US tech giant, which dominates Internet search engines globally, had been sent a Statement of Objections - effectively a charge sheet - to which it can respond. “I am concerned that the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules,” she said. “If the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.” Both Vestager and her predecessor, Joaquín Almunia, have been under pressure from European and US tech concerns to investigate Google’s activities on the continent, where competitors – including Microsoft – say Google has abused its 90% market share by using its products, particularly search, to illegally promote its other products and services.

Asia

The global economy was more likely to enjoy a reasonable recovery over the next two years benefiting from recent falls in energy prices and exchange rate movements, the International Monetary Fund said. The twice-yearly forecasts show India is expected to outperform China in growth for the first time in 16 years. Although the fund has recently told countries they “could do better” to improve medium-term prospects, the World Economic Outlook is the first since 2011 to suggest economies are putting the 2009 financial crisis behind them. Since October, the fund documented divergent trends in economic performance across the world with strength in the US and UK and greater weakness in the eurozone, China and Latin America. Inflation has fallen everywhere and the outlook for many emerging economies, with the important exception of India, has deteriorated.

Tarnovo constitution

The Tarnovo constitution was adopted by Bulgaria’s Constituent Assembly on April 16, 1879. It included 169 articles grouped into 22 chapters. The Assembly adopted the principle of separation of powers into executive, legislative and judiciary. The Constitution protected civil freedoms, the inviolability of ownership, the freedom of individuals, the equality before law, the right to association, the abolition of class-related rights and slavery, etc. Eastern Roumelia, a short-lived province with its centre in Plovdiv, which survived from 1879 to the Unification in 1885, had an Organic Statute in force. It was developed by a special commission consisting of representatives of the Great Powers and the Ottoman Empire. The Statute provided for strict separation of powers and the Provincial Assembly was at the top of the legislative power. The Turnovo Constitution was the fundamental law of Bulgaria from 1879 to 1947. It was amended twice on May 15, 1893 and July 11, 1911 and it was suspended twice at the time of the Full Powers Regime (July 1, 1881 – September 6, 1883) and the 19-May Regime (1934).

On that day:  Maryanski monastery The Holy Transfiguration