Financial news

The Prime Minister of Greece Alexis Tsipras has proposed elimination of the tax levied on transactions in three countries, including Bulgaria, Finance Minister Vladislav Goranov told the parliamentary budget committee. Greece's decision from March envisaged that transactions with Bulgaria, Cyprus and Ireland should be taxed by 26 per cent, because they could be supposedly fictitious. The idea of Athens is to retain 26% (as is the corporate income tax in the country) as a form of prevention for all counterparties and to unblock them only when it is demonstrated that their goal is not to avoid tax payment. Minister Goranov immediately referred the issue to the European Commission and expects an opinion from there. If the tax is not repealed, Bulgaria will sue Greece, Goranov said.

“2014 tendencies were for increase of the number of the jobs,” said Elka Dimitrova, Director of the Labour Market and Labour Mobility Policy Directorate with the Ministry of Labour and Social Policy, in connection with the realisation of a project “Establishment of system for prediction of the needs of the manpower with specific characteristics”. Dimitrova remarked that by the end of May the number of the unemployed was 331,000. “There is a year-to-year decrease, too. There is also a decrease in the number of the unemployed youths. At the moment they are around 50,000, which is 12,000 less compared with last year,” the expert said.

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

Companies

More than 1,000 big companies in Bulgaria are expected to suspend their production capacities as a mark of protest against the planned 13% to 20% increase of the electricity price in Bulgaria. Despite the meeting with Prime Minister Boyko Borisov and ministers and the outlined measures the business is still waiting for the real solution of the problem in the energy sector, as well as for reform of the overall price formation model. The effective striking activities will seize the entire country and all types of production. “The protest will be joined mostly by big industrial energy consumers. These are companies with productions orientated to export, companies that make the backbone of the export – the metallurgy, glass industry, concrete industry, and others,” said Kamen Kolev with the Bulgarian Industrial Association. According to Bulgarian Finance Minister Vladislav Goranov, however, the price increase is inevitable at the background of the BGN 3.7 billion deficit in the National Electricity Company (NEK). “No matter what unpopular measures we adopt, the bitter pill will have to be taken, otherwise we risk depreciating the few good assets of the state left until we decapitalise it,” the minister remarked.

Eva Magazine wants to merge with Bulgarian subsidiary of Greek publishing group called Atika media Bulgaria. This became clear from a message on the site of the Commission for protection of competition. As a result of negotiations between the two companies on the market of magazines a new publishing group called Atika EVA AD is being set up. It is composed of Agency EVA LTD, publisher of EVA magazine and owner of Nova broadcasting group (the company that owns Nova TV) and Atika Media Bulgaria LTD, publisher of magazines such as Playboy, Esquire, Joy, Grazia, OK and Forbes. It is expected that the concentration will have an impact on the domestic market of magazines and the related with it market of ads posted in magazines

Polish restaurant operator AmRest Holdings said it completed on Wednesday a 16.4 million euro ($18.4 million) share purchase agreement between its Polish unit and Marinopoulos Coffee SEE, which operates the Starbucks coffee stores in Romania and Bulgaria. As a result of the deal AmRest Poland acquired 100% of the shares of S.C. Marinopoulos Coffee Company III S.r.l. (MCC Romania) and Marinopoulos Coffee Company Bulgaria, AmRest Holdings said. The two companies are the sole operators of the Starbucks coffee stores in Romania and Bulgaria. "All conditions precedent and approvals required under the agreement including in particular the consent of the owner of Starbucks brand, landlords’ approvals and satisfactory result of due diligence performed on MCC Bulgaria have been fulfilled," AmRest Holdings said.

Bulgarian Development bank, which is trustee of bondholders in Bulgarian State Railways, is selling 500 freight wagons of the state holding. Total initial auction price of the rolling stock is BGN 9 million. Carriages are pledged in favour of the bank, which is trustee under the second debenture loan to the amount of EUR 120 million, taken in 2007 so that old debts are repaid. The state company has problems paying it off, which made the sale inevitable. Initial price of cars on the tender with secret bidding varies from BGN 9730 to BGN 37 thousand. Obligatory fee for participation in the announced procedure is handed out, as its amount is 10% of the initial auction price of the desired groups of wagons. Auctioned cars are not used by State Railways. The company’s total liabilities to banks are assessed at BGN 330 million. Bulgarian State Railways’ total liabilities are BGN 530 mln.

The two shareholders of LUKERG Renew, a 50/50 joint venture between ERG Renew and LUKOIL created in 2011 with a view to investing in the wind sector in Bulgaria and Romania, have mutually agreed to dissolve the joint venture, Italy's ERG said. "We view this transaction favourably, as it will allow us to expand our presence in the East European wind power market with high quality assets and, in the immediate future, to improve their operational performance [..]," Luca Bettonte, ERG Group chief executive officer, said. As part of an agreement on sharing of the assets pertaining to the joint venture, ERG Renew will be assigned the 40 MW Tcherga and the 14 MW Hrabrovo wind farms in Bulgaria and the 70 MW Gebeleisis wind farm in Romania while LUKOIL will retain ownership of just the 84 MW Topolog wind farm. The transaction's enterprise value amounts to approximately EUR 27 million, mainly represented by non-recourse project financing. The closing is expected to take place by the end of this year.

The Bulgarian Parliament approved the lifting of the bank secrecy for banks declared insolvent. The MPs approved the amendments to the Law on Credit Institutions at a second reading without holding a debate. According to the adopted amendments, an assignee will have to announce the names of natural and juridical persons and the size of their deposits within a period of six months after the insolvency of a bank. The assignee at an insolvent bank will also have to announce the names of those holding credits and deposits with privileged interest rates. The amendments were devised by the ad hoc inquiry committee on examining the facts and circumstances related to the collapse of the Corporate Commercial Bank.

Europe

The overall balance of sales volumes among UK retailers decelerated to +29% over the year to June, less than expected and below a surge a month before, the Confederation of British Industries (CBI) reported. "Summer is a time of optimism for retailers and this year is no different. Even though growth slowed slightly this month, retailers are not letting that subdue their hopes for the season," Barry Williamson from the CBI commented on the report. "Low inflation – expected to stay below 1% throughout this year – has given customers more discretionary income. The power of the pound in their pocket is going further and shoppers are spending more on treats, like flowers and jewelery, as well as on activities with their families," he added. The official hard data showed retail sales in the UK again performed above estimates in May, as food stores posted a seven-month high and sales in household goods rose on the back of a strong housing market. Steady growth in the retail sector suggests consumers in the UK do not tend to postpone major purchases due to their expectations that prices will continue to fall further in the future – a phenomenon called deflationary spiral.

America

The Canadian pension fund beasts’ unique approach to investing could see them challenge Wall Street, says Ben Marlow. Since 1790, the United States has suffered 16 banking crises, while Canada, a country that counts the US as its largest trading partner, has experienced none — not even during the Great Depression. How has Canada achieved such an extraordinary feat? Two reasons, according to the IMF: limited exposure to international banking operations, which meant far fewer foreign liabilities than many of their overseas peers and less globally integrated banking systems; and, Canada’s restrictions on mergers of major domestic banks, where rules prohibit a single shareholder — domestic or foreign — from owning more than 20pc of voting rights in a major bank. The World Economic Forum described Canada’s banking system as the most sound in the world, and Mark Carney was appointed Bank of England Governor largely on the basis of his impressive work at the Bank of Canada.

Asia

China will invest 500 billion yuan ($80 billion) in 193 major domestic aviation projects this year, the country's aviation regulator said, to meet growing demand from travelers and to bolster growth as the world's second-largest economy slows. The plan was outlined in prepared remarks to be delivered later on Wednesday by Li Jiaxiang, head of the Civil Aviation Administration of China, at an aviation forum in Beijing. The remarks did not specify details about the projects. The announcement comes amid a wider effort by Beijing to increase overall infrastructure spending after economic growth slowed to a six-year low in the first quarter. The country's state planner has so far in the first six months approved billions of dollars of railway and airport projects. China's aviation sector has grown rapidly in recent years, driven by demand from the country's increasingly wealthy middle class. Outbound passenger volumes rose 39 percent year-on-year over the January-May period, Li said.

Zhabliano Monastery St. John the Baptist

Just under the Kurilovo peak, at the foot of Koniavska Mountain, and only at a 2 km distance southwards of Zhabliano village (Western Bulgaria) is settled the Zhabliano monastery St. John the Baptist. Nobody knows when exactly the monastery was built. During the Ottoman yoke the monastery was destroyed. Later in the 18th century it was renovated. The complex consists of three–nave, coupon church, built in 1884 and some houses. A monastery school was established there during the first half if the 19th century. Since 1879 till his death in 1881 abbot of the monastery was Averkiy Popstoyanov., who was an eminent teacher and an important cultural figure, during the struggles for independent Bulgarian church. After his death he was buried in the church vicinities. The monastery is proclaimed as a monument of culture.