Financial news

In the first quarter of 2015, Bulgaria had the third-lowest government debt to GDP ratio in the EU, at 29.6%, preceded by Estonia with 10.5% and Luxembourg with 21.6%, according to Eurostat data. The highest ratios of government debt to GDP at the end of the first quarter of 2015 were recorded in Greece (168.8%), Italy (135.1%) and Portugal (129.6%), according to the statistical office of the European Union. Compared with the fourth quarter of 2014, fifteen Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2015 and twelve a decrease. The highest increases in the ratio were recorded in Belgium (+4.5 pp), Italy (+3.0 pp) and Croatia (+2.6 pp). The largest decreases were recorded in Greece (-8.3 pp), Latvia (-5.1 pp) and Lithuania (-2.7 pp). Compared with the first quarter of 2014, fourteen Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2015, twelve a decrease and in Estonia there was no change. The highest increases in the ratio were recorded in Bulgaria (+10.0 pp), Croatia (+6.2 pp) and Slovenia (+4.8 pp), while the largest decreases were recorded in Greece (-5.5 pp) and Hungary (-4.7 pp).

Bad and restructured loans of banks melt. It is observed in loans for business, as well as for citizens. In late May troubled loans to business are worth BGN 6.041 billion, which is BGN 6 million less than the previous month, according to the BNB. The share of bad and restructured loans of the total volume of loans to business, however, increased slightly to 19.9 percent from 19.65 percent a month earlier. The reason for this is that in May significantly reduced the total amount of loans to business. Corporate lending for the month declined by BGN 414 million to BGN 30.35 billion. Apparently companies are seriously limited making new loans. Troubled loans for households also decreased - by BGN 4 million to BGN 3.239 billion. Thus the share of problem loans to citizens shrank to 17.74% from 17.77% a month earlier. The contraction of bad loans is a good sign for the banking system. The problem is that the granting of new loans is going quite slowly.

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

Concessions

Dundee Precious Metals Krumovgrad EAD got permission for o exploration of a new terrain by the Government yesterday. The company will prospect metal ores in Trite babi location, situated in Blagoevgrad region, in the villages of Bogolin, Valkosel, Zhizhevo, Kochan, Kribul, Satovcha, Slashten, Tuhovishta and Furgovo, Satovcha municipality and villages of Ablanitsa, Hadjidimovo Municipality, Blagoevgrad region. The permission is granted for a period of three years. Minimum expected volume of the investment is over BGN 180 thousand, while activities on environmental protection are assessed at BGN 5500. Burgas-based company Europroject got concession for extraction of construction materials – trachyte suitable for the production of fractions for road base and asphalt mixtures. The company will operate in Breshela deposit, located on the territory of Ravadinovo village, Sozopol municipality. The concession is granted for a term of 25 years. It is expected that the investment will go over BGN 300 thousand, while activities for environmental protection will take up slightly over BGN 70 thousand.

Companies

Bulgarian Parliament established an Electricity System Security Fund by voting some amendments to the Energy Act on second reading. The financial resources in the Fund will be used to offset the shortage of financing in the National Electric Company (NEK) for purchase of electricity under the long-term agreements with renewable source power plants, high efficiency cogeneration of power and heat, and the two US-owned TPPs in the Maritsa East basin. Payments to the public supplier will be on a monthly basis. The chairperson will be nominated by the Minister of Energy, and the Environment and Water Minister and the Finance Minister will nominate one member each. The Fund is to raise 5 per cent contributions on the monthly revenues of all energy producers. The proceeds from the sale of greenhouse gas allowances will also go into the Fund. The funds will be used to maintain the operation of the Fund and to offset the costs of the public supplier. The monthly 5 per cent contributions will be based on electric power producer revenues from sold electricity (VAT excluded); as well as of importers of electric power for the domestic market (VAT excluded).

Bulgarian software developer Sirma Group Holding has obtained approval from the country's financial regulator for its initial public offering (IPO) prospectus and expects to debut on the Sofia stock exchange in early September. The company will offer investors a total of 18,491,858 shares, of which 16,000,000 new shares and 2,491,858 existing ones, with a nominal value of BGN 1 each. The IPO will be considered successful if at least 8 million shares with an issue price between BGN 1.2 - 1.65 each are subscribed for. Sirma Group will invest the proceeds from the IPO in technological and global business development. If Sirma Group succeeds in raising the amount of money it targets, this would be the largest public offering on the Sofia stock exchange since 2007. Sirma Group Holding's share capital stood at BGN 49.8 million by end-March. The IPO will be managed by local brokerage Elana Trading. Software developer Sirma Group Holding, founded in 1992 simultaneously in Bulgaria and Canada, employs more than 300 and operates on five continents. Its projects include semantic technology, mobile applications, enterprise resource planning (ERP), business intelligence, electronic government, financial and bank services.

Fitch Ratings said it has affirmed the long-term Issuer default ratings (IDRs) of United Bulgarian Bank (UBB) at 'B' with a stable outlook, and of Raiffeisenbank Bulgaria at 'BBB-' with a negative outlook. The agency also upgraded Raiffeisenbank's Viability Rating (VR) to 'bb-' from 'b+'. The upgrade in Raiffeisenbank's VR to 'bb-' from 'b+' reflects improvements in asset quality, further to the bank's action to clean up its legacy loan book through write offs and sales, and a return to operating profitability in 2014, driven by lower credit risks costs. The bank also holds sizeable capital buffers. Fitch Ratings also said in its statement: "UBB's IDRs are driven by its standalone financial strength, as expressed by its VR of 'b'. Raiffeisenbank is Raiffeisen Bank International's (RBI) 100%-owned Bulgarian subsidiary. The bank's IDRs are notched down once from its parent, driven by a high probability of support, in case of need.

Europe

Blackstone Group LP is buying a portfolio of bad loans with a nominal value of EUR 790 million from Spanish lender CaixaBank SA, according to two people with knowledge of the matter. The debt is linked to newly completed residential units as well as land and homes under development, according to the people, who asked not to be identified because the deal is not yet complete. The sale of the portfolio, known as Tourmalet, is expected to close at the end of the week, the people said. Spanish banks are seeking to sell off bad real estate debt that has weighed on their balance sheets since the financial crisis sparked a property crash. Lenders foreclosed on more than 70,000 homes in 2014 with Andalusia, Catalonia and Valencia hit the hardest, according to data from the National Statistics Institute. Blackstone, along with other private equity groups, has seen the Spanish opportunity for at least two years. Back in July 2013, the group made its first investment in Spanish real estate buying 18 apartment blocks with 1860 apartments for EUR 125 million.

America

Apple has just released its fiscal Q3 2015 earnings, reporting $49.6 billion in revenue, $10.7 billion in net profit representing $1.85 per share. Compared to the year-ago quarter, it corresponds to a growth of 32.5 percent in revenue and an impressive 44.5 percent jump in EPS. Despite this impressive growth rate, shares are currently falling in after-hours trading — it’s a bit ridiculous. Expectations were pretty high following Apple’s last two blockbuster quarters — the company reported the largest corporate quarterly earnings of all time on Q1 2015 largely thanks to the iPhone 6 and 6 Plus. Fortune’s consensus among analysts was for Apple to report earnings of $1.81 per share on $49.50 billion in revenue, with both revenue and EPS exploding 47 percent and 34.6 percent, respectively; this is an insane growth prediction.

Asia

With the Chinese government proposing taking a significant step towards removing restrictions on the export of privately held capital under a program called the Qualified Domestic Individual Investor program or QDII2, theoretically $6.61 trillion of Chinese wealth could be enabled to be reinvested that wealth in international real estate and other assets around the globe. Chinese property portal Juwai.com estimates QDII2 - if rolled out nationally- could theoretically deliver as much as $2.3 trillion to international residential real estate markets alone. The likely amount is probably closer to $661 billion. The latter figure depends on a reasonable estimate that wealthy Chinese individuals allocate approximately 10 percent of their total assets to international real estate, both commercial and residential. The size of these figures highlights that, "If China undergoes a material liberalization over the next decade, the increase in gross flows will likely be very large relative to the world economy", says Juwai.com executives.

The Mogilanska Hill – town of Vratza

The hill represents a half-destroyed mound, which had been rising for a long time in the yard of one house in the old part of Vratza. The place was studied by archeologists over the period 1965-66, and they found a tomb, which they supposed had most probably been robbed in the ancient times. They found two other tombs as well, which were relatively preserved. Specialists discovered two human skeletons – one of an old man and one of a young woman, as well as many silver, bronze and golden vessels, different weapons and agricultural equipment. Obviously, it had been a rich funeral, which made archeologists believe an ancient Thracian princess had been buried here. The head of the young woman was decorated with a gold wreath, similar to laurel twigs, weighing 205 g and made of the purest gold. It was supplemented by a pair of massive golden ear-rings, decorated in their bottom part with figures of sphinx and plant ornaments. In the third grave, archeologists found one male and one female skeleton, as well as many golden and silver jugs, jewels, clay articles, etc. The rich findings in the Mogilanska Hill prove the general opinion, that this is a royal tomb, related to the tribal dynasty, which ruled in the IV century and inhabited the lands in the current Vratza region.

On that day:  Bratanova Cave