Financial news

The state budget for July did not report a deficit for the first time in 5 years and has a surplus of BGN 801 million. ‘Revenues and grants under CFP as of 31.07.2015 are expected to be over BGN 19 million (62.7% of the annual estimate), something we have not seen in recent years,’ said deputy Minister of Finance Kiril Ananiev. For comparison, in the same period of the previous year CFP had a deficit in the amount of BGN 1,147.2 million (1.4% of GDP), which means that as a relative share of GDP the budget position has improved by 2.4 percentage points. The higher revenues and grants continue to be the main factors for the improved budget position as of July 2015.

The Cabinet has identified 10 bureaucratic obstacles to investors that need to be eliminated. By January working groups should propose specific legislative and administrative solutions. Among the problems are difficulties in connection to the networks of the technical infrastructure, time and number of procedures for issuing building permits, as well as inconsistencies in administrative procedures. Frequently changing legislation, the poor state of road infrastructure, lack of professionals, corruption and the lack of an independent judiciary are also among the barriers to investors. The remaining obstacles are the low efficiency of the legal framework for dispute resolution, administrative procedures relating to international trade and related costs for imports and exports, and the time for payment of taxes. In March, the government reported that the simplifications adopted in 2012 so far saved companies a total of BGN 238.5 million each year.

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

Companies

Bulgaria will again have its own aircraft construction, or more precisely assembling of planes. A Bulgarian company named ACS starts assembly of ultra-light aircraft model SKYLEADER 600 in the Terem-Letets in Sofia’s district Vrazhdebna. The machine will come in parts from the aviation plant of the manufacturer Jihlavan Airplanes in the Czech Republic. The Bulgarian company has a license for installation and sale in Bulgaria, Greece, Romania and Poland. SKYLEADER 600 is a two-seater ultra-light aircraft with price as a fancy car. It is practical as the air plane moves with motor gasoline A-95.

Serbian state-owned energy utility EPS will cut power to local glass maker Srpska Fabrika Stakla as of September 1 over unpaid electricity bills. Srpska Fabrika Stakla (SFS) owes 250 million dinars to EPS for power supplies and has failed to settle part of its debt by July 31, as previously agreed with the EPS electricity supply unit, EPS Snabdevanje. "If it is determined that there is no justifiable reason for the glass maker's failure to pay part of the debt, EPS will implement the measures that have been previously agreed with the management of the plant," RTS quoted the utility as saying in a statement. Paracin-based SFS, which cut its loss to 3.27 billion dinars last year from 13.7 billion in 2013, was taken over in 2012 by international group Glass Industry, affiliated with Bulgarian businessman Tsvetan Vasilev.

A company owned by a Bulgarian national has bought Serbia's bankrupt brewery Niska pivara for 130 mln dinars (EUR 1.08 mln). The Nis-based buyer, Grupa kapitalni proekti, has been established on 2 June 2015,. The chairman of the board of creditors of Niska pivara Miljan Damnjancevic said the owner of Nis-based Grupa kapitalni proekti is a Bulgarian citizen, named Stefan Borisov Stefanov. Stefanov takes part in management of the following companies: Patstroy EOOD-Nova Zagora, Technoleasing AD, Technomash - Bulgarian Industrial Group AD, Solar Systems 1 EOOD and Zografos Anton EOOD as he holds shares in most of them.The new owner is planning to resume production and re-hire some of the brewery’s former workers. Niska pivara has been insolvent since 2013. The first call for public bidding was held in September last year at an initial price of 396 million Serbian dinars. Since then, there were eight unsuccessful attempts to sell the beer plant through public bidding. The last one failed last month when the price was cut to 160 million dinars. Niska pivara can produce 200,000 to 300,000 hectoliters of beer.

Bulgarian software company Ontotext announced a global partnership with the American company Keen Analytics. The partnership RDF – based database GraphDB Ontotext will be merged with the consulting services of Keen Analytics, focused on semantic and ontological analysis of business information. Ontotext decision will also be integrated with the educational services of the American company, optimizing data access for its clients. In turn Bulgarian software company will offer training and video materials created by Keen Analytics. It is expected that as a result of the partnership decision GraphDB to be much more accessible to clients. The collaboration of the two companies will facilitate the use of semantic technologies from business organizations, providing better insight on customers and their markets, as well as the latest trends, considered by Ontotext. Ontotext is part of a group of Sirma Group Holding, which plans an initial public offering on the Bulgarian Stock Exchange in September.

In the beginning of June the largest part of the site of Spanish construction group Riofisa, where it considered building joint complex in the region behind the Central railway station was acquired by the Spanish bank group Sabadell. Buyer is a subsidiary for real estate of the credit institution - Sabadell Real Estate Development. Part of the loan of the construction company to the bank was paid off via the deal. The price of the transfer of the site with an area of 85 acres is EUR 10.2 million. The other subsidiary of the company in Bulgaria- Riofisa developments owns the remainder of the Spanish group’s properties in the country. They include a site of 23 acres also in the region of the central railway station in Sofia, as well as a site with an area of 31 acres in the Plovdiv neighbourhood Trakia. The properties were detached and transferred from the one company to the other in the end of 2008, as back then their total assessment was BGN 24.8 million. Plans for Bulgaria were related to construction of a multi-functional complex in Sofia. It had to be composed of commercial and entertainment centre at three levels and a 100-meter tower, where offices and a hotel has to be built, together with a residential complex and parking.

Europe

Swiss consumer prices fell year-on-year in July for the ninth month in a row, highlighting deflationary pressure since the Swiss franc soared against the euro after the central bank removed a cap on its value in January. Consumer prices dropped 1.3 percent from July 2014, the Federal Statistics Office said, more than the 1.0 percent they fell in June and further than the average forecast of a 1.1 percent drop in a Reuters poll of economists. It was the steepest year-on-year drop since 1959. Prices fell 0.6 percent on a monthly basis, compared with a 0.4 percent drop forecast in the Reuters poll. Prices had risen 0.1 percent on the month in June. The monthly decrease was mainly due to lower prices for clothing and new cars, the statistics office said. Heating oil and hotel stays were also cheaper. Petrol prices rose. The Swiss National Bank abruptly removed its cap on the franc - set at 1.20 per euro - on Jan. 15. The franc's subsequent surge has lowered the price of imports into Switzerland from the euro zone.

America

Four months after going public, Etsy Inc. is crafting a return to its IPO price. The online marketplace reported another quarterly loss and warned of possible trouble ahead despite boosting sales and attracting more buyers and sellers to the site. Etsy’s second straight disappointing report card as a publicly traded company sent shares down more than 16% in after-hours trading, near its $16 IPO price set in April. The stock has fallen about 46% since the close of its first day of trading. The Brooklyn, N.Y., marketplace for handmade and vintage goods blamed currency fluctuations and higher marketing expenses for the loss of $6.35 million. That was wider than the $3.15 million reported a year earlier. Sales rose 44% from a year ago to $61.4 million, matching the sales growth from three months prior. Etsy also faces the threat of Amazon.com Inc., which is looking to compete by poaching Etsy sellers for a new section of its website called Handmade.

Asia

The EU and Vietnam have reached an agreement in principle for a free trade agreement (FTA), after two and a half years of intense negotiations. Following a telephone conversation this morning between EU Trade Commissioner Cecilia Malmström and Vietnamese Minister of Industry and Trade Vu Huy Hoang, all issues of substance have been agreed, and both sides have reached a mutually beneficial and balanced package. This agreement will remove nearly all tariffs on goods traded between the two economies. "We have a deal. This finely balanced agreement will boost trade with one of Asia’s most dynamic economies. It sets a new, better and modern model for Free Trade Agreements between the EU and developing countries, and establishes a good standard for the trade relationship between the EU and South East Asia as a whole" Commissioner Malmström said. “Vietnam is a growing economy and once this agreement is up and running, it will provide significant new opportunities for companies on both sides, by increasing market access for goods and services.

Feast of the Transfiguration (6 August)

On 6 August, the Bulgarian Orthodox church celebrates the Feast of the Transfiguration of Jesus Christ. According to the Holy Writ, on this day Jesus strengthen the faith of His disciples in His divine origin by transfiguring in front of the eyes of three of them – the Apostles Peter, James and John. His face shone like the sun, and His garments became glistening white. Moses and Elijah appeared with Christ, talking to Him. On the Feast of the Transfiguration, the first grapes are picked and handed out to relatives, friends and neighbours. People believe that this day is the breaking point of summer – from this day on, the weather turns colder and the autumn starts to approach us.

On that day:  Kozarska cave (Goat cave) Shiroka Luka