Financial news

Bulgaria's gross domestic product (GDP) per capita remained the lowest among EU member states in 2014, at 55% below the EU average, the bloc's statistics office said. Romania and Croatia followed, with ratios of 46% and 41% below the EU average, respectively, the bloc's statistics office said in a statement on Tuesday. Bulgaria also ranked lowest among EU counties in terms of actual individual consumption (AIC) per capita in 2014. Bulgaria's AIC per capita expressed in Purchasing Power Standards (PPS) was 49% of the EU average last year. Romania and Croatia followed with 55% and 59% of the EU average, respectively, Eurostat said in a statement. The PPS is an artificial currency unit that eliminates price level differences between countries.

Bulgarians working abroad are the most important source of fresh capital flowing into the Bulgarian economy in yet another month. In April alone they sent about EUR 74 mln to their relatives, according to BNB data. As comparison, the FDI in April stand at EUR 67.8 mln. What is more, the data of the BNB for the money sent by workers abroad are well under the real number as it accounts only the money sent through banks or other financial companies, as well as it does not take into account transfers of below BGN 5000. According to data of IMF, Bulgarians working abroad sent about USD 1.72 bln (over BGN 2.5 bln) back to the country in 2014. Meanwhile, FDI in Bulgaria in 2014 is EUR 1.289 bln (about BGN 2.5 bln).

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Companies

ABB Bulgaria employed 400 new people over the past year and is planning to hire additional 200 employees by the end of 2015 at its second production plant in the town of Rakovski. This was announced by representatives of the company on Thursday at a press conference on the occasion of the first anniversary since the opening of the second factory in Rakovski. Ekkehard Neureither, Country Managing Director of ABB Bulgaria, provided a brief introduction of the company’s history, main areas of operation, key products, core values and existing partnerships. ABB, which stands for ASEA Brown Boveri, is a multinational corporation headquartered in Zurich and a global leader in power and automation technology. The company is present in more than 100 countries, employing more than 140 000 worldwide with its revenue in 2014 amounting to USD 40 bln.

Italcementi Group, which is owner of two factories in Bulgaria Devnya cement and Vulkan Cement has presented several new products. Among them are concretes that are used for roads with less traffic, concrete protective fences, protective embankments of watercourses and drainage concrete i.idro DRAIN for pedestrian and bicycle lanes and parking lots. They all are produced in Bulgaria. The company plans to grow through innovations and puts a stress on Devnya cement new factory’s key place in the group, as that is where the transparent concrete is produced. The company invested BGN 320 million in its new production line in Devnya which has been working for several weeks now. There are three producers of concrete in Bulgaria. Besides Italcementi Group which has a 33% market share, these are Pleven cement and Holcim Bulgaria owned by Holcim, and Golden Panega Cement, purchased by the Greek Titan. About 17-18% of the concrete at the market comes from imports, mainly from Turkey.

Bulgarian Minister of Environment and Water Ivelina Vasileva and Mayor of the town of Burgas visited Thursday the area where Lukoil Neftochim spilled automobile gasoline on Wednesday. On the night of Wednesday to Thursday the minister visited the affected area to get acquainted with the work of the emergency teams. The entire expert resource of the Regional Inspectorate for Environment and Water – Burgas was mobilised to deal with the incident. According to the authorities, there was no risk for the local population. There was no air pollution. “A large amount of automobile gasoline has penetrated into the area of Chakarliyska River and the buffer zone of the Vaya lake,” she said. The minister remarked that the area of the spill had been restricted. She explained that teams with the Regional Inspectorate for Environment and Water, the municipal authorities and the fire department had responded to the signal immediately so as to restrict the spill. “Lukoil Neftochim will be imposed the severest possible sanction for the gasoline spill close to the Dolno Ezerovo residential quarter in the Bulgarian coastal city of Varna,” Ivelina Vasileva remarked.

Real estate’ fund FairPlay Properties has sold in advance 30% of apartments in the first residential bock from its project in Malinova dolina neighbourhood, next to National Sports academy’s playgrounds in Sofia. Construction of the residential complex started three months ago, as preliminary contracts for sale have been already signed. Purchases from young families and by people at the middle age who buy with the aim of investment are almost equal. About half of the premises are bought with personal savings, the other with loans. Under the project in Malinova dolina two buildings, located behind one more that is common have to be constructed. Between them there is a park space. The first building has to be finished in the spring of next year, earlier from the envisaged deadline due in September 2016. Total built up area of the building in question will be 4531 square meters, with one underground level and eight floors above. There will be 38 apartments, each with a personal parking lot. The overall investment in the complex is assessed at BGN 15.53 million VAT excluded.

Management company Alaric capital starts offering 15 mutual funds of GAM and Julius Baer. They have already been registered in the Commission for financial supervision and their sale may start. There are the consecutive funds of foreign management companies that enter Bulgaria, with which the overall number reached more than 10. More than 100 are the proposed schemes. Alaric capital is a Bulgarian management company of the unanimous American company, founded in New York in 2001. Bulgaria is the first country in Eastern Europe where Swiss bank Julius Baer will offer its funds. It is owner of the management company GAM. If there is interest, sales may start in Romania, as well. GAM and Julius Baer manage funds with assets assessed at USD 124 billion globally. Their main clients are different types of institutions, such as insurance companies, pension funds, and large private investors. For now a total of 15 funds of the two management companies among which 6 regional and 5 sartorial will be offered in Bulgaria. The minimum investment for the country is EUR 1000.

Europe

Denmark goes to the polls in an election that will either seal a famous comeback for the incumbent Social Democratic prime minister, Helle Thorning-Schmidt, or give a boost to the British prime minister, David Cameron, in his quest for EU renegotiations. Thorning-Schmidt’s governing centre-left coalition, which campaigned on a resurgent economy, has consistently trailed in opinion polls since the last election in 2011, but in the past few weeks has pulled level with the blue bloc led by the Venstre (Liberal) party. In what many saw as a concession to the Eurosceptic Danish People’s party (DPP), the four parties of the rightwing bloc – Venstre, DPP, Conservatives and Liberal Alliance – last week announced their joint support for Cameron’s bid to renegotiate the terms of Britain’s membership of the EU, in particular with regard to welfare benefits for EU migrants.

America

The Federal Reserve will raise short-term interest rates only gradually in coming years, Janet Yellen said on Wednesday, as US policy makers edge cautiously towards tighter monetary policy. The Fed chair said there were signs that the US economy had regained some momentum following a dismal start to 2015, as officials stuck with projections suggesting the first rate increase could come as soon as September. However, Ms Yellen said policy makers still wanted to see more “decisive” evidence of the strength of the recovery before taking the first step. Projections released by the Fed suggested officials expect an even shallower subsequent path of tightening in the next two years, underlining how nervous rate-setters are about derailing a tentative recovery. The Fed is treading a precarious line as it attempts to signal the first rate rise since 2006 while damping the risk of a market tantrum that could damage global growth.

Asia

Cisco Systems Inc. will invest more than $10 billion in China during the next few years, a costly tactic to get back in the government’s good graces and stay competitive with Huawei Technologies Co. Cisco’s investment agreement, sealed with China’s state economy planner, comes as the government promotes local firms at the expense of American companies such as Qualcomm Inc. and Microsoft Corp. China said it was concerned with the security of U.S. technology since Edward Snowden revealed details of spying by the National Security Agency. Cisco is losing market share in the networking business to Huawei and ZTE Corp., both based in Shenzhen, and has said it’s open to forming partnerships in China. Chief Executive Officer John Chambers said he is optimistic Cisco will benefit from improved relations between the U.S. and China, yet the company's $10 billion may not lead to significantly more business there.

Yavor Dimitrov (19.06.1965-11.09.2008)

Yavor Dimitrov was born on June 19. For many years he was the Head of the Payment Systems Division at BNB, which is responsible for the administration and operation of the real-time gross settlement system RINGS. Yavor was an active participant in the creation and changes of the legislation related to the capital markets, the payment system and their harmonization with the EU requirements in the field. He participated in many significant projects in the banking, among which is the introduction of the RINGS system, the introduction of the International Bank Account Number (IBAN), the preparation for joining the Single Euro Payments Area (SEPA). He was awarded the special prize of IDG Bulgaria for significant and professionally realized project for his contribution to the development of RINGS in 2003.
Yavor was Head of Payment Systems Division at BNB (2000-2008), member of the managing board of Investor Compensation Fund, Doctor of Science, member of the managing board of CIO club, founder of RotarAct – Sofia, member of Rotary Club – Sofia, head of the Sports Club of BNB.

The rich creative and professional biography of Yavor was reached with a lot of steady and hard work. There will always be a memory of Yavor’s life full of devotion, creativity, skills and knowledge. Banking, capital market, relatives and friends all lost the everlasting energy of one of the most creative, self-giving in the name of Bulgaria’s prosperity people.

On that day:  Bogomil Rainov Thracian megalithic culture in Strandzha