Financial news

At the end of June, Bulgaria had a budget surplus of BGN 890 M, which represented 1.1 % of the projected Gross Domestic Product (GDP). This was revealed after the regular meeting of the Council of Ministers on Wednesday, which approved the implementation of the government budget and the consolidated fiscal programme. This excess is the result of a surplus of BGN 439.9 M under the government budget and a surplus of BGN 450.2 M under the EU funds. This is a huge progress compared to the same month in 2014, when Bulgaria had a budget deficit of BGN 996.4 M, marking an improvement of 2.3 %. This improvement is largely due to the growth in the collection of revenues under the government budget and the increase of grants. The collected revenues and grants exceeded BGN 16.3 B, which was an increase of more than BGN 2 B or 15 % compared to June 2014. The expenses exceeded BGN 15.4 B, which was an increase of BGN 246 M (1.6 %) compared to the same month in 2014. At the end of June, the fiscal reserve stood at BGN 11B.

Bulgaria’s consumer price index (CPI) fell by 0.2 per cent in July and the annual figure recorded 0.2 per cent deflation. Bulgaria went through 19 consecutive months in which the year-on-year CPI recorded deflation, a streak that ended in March and the CPI briefly peaked in May at 0.9 per cent annual inflation before resuming a downward trend. Food prices shrank by one per cent in July and non-food prices were 0.3 per cent lower, while services prices rose by 0.9 per cent compared to June. In annual terms, services prices remained the only driver of CPI growth, rising by 2.7 per cent compared to July 2014, while food prices were 0.9 per cent down and non-food prices were 2.3 per cent lower. The harmonised CPI figure, calculated by NSI for comparison with European Union data, was 0.2 per cent higher on a monthly basis, but the annual harmonised CPI remained in deflationary territory for the 24th consecutive month, having shrunk by one per cent compared to July 2014. Food and beverage prices were 0.5 per cent down, on an annual basis, and transportation costs were 7.2 per cent lower, while the price of utilities and rent has increased by 3.8 per cent compared to a year earlier. The three categories account for half of the harmonised consumer price index.

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

Companies

Sweden-headquartered Trelleborg group is making further investment in its Bulgarian unit for advanced liquid silicone rubber (LSR) injection molding solutions. The investment in support of the technology at Trelleborg Sealing Solutions LSR facility in Pernik, is part of the group’s commitment to developing its LSR injection molding manufacturing footprint. Boasting compliance with ISO 22000 Food Safety Management System, in particular, the Bulgarian facility will focus on components for sensitive food and beverage applications. Trelleborg utilized an option from 2011 to acquire the outstanding 50% of the shares in the Trelleborg Sealing Solutions LSR operation in Bulgaria in April this year. The latest investment in the Pernik production facility will increase manufacturing floor space by 150% and will more than double the capacity of the tool room. The expansion will allow future growth in small- to medium-sized technical LSR, especially over molded parts for food, beverage, baby care, sanitary, industrial and automotive electronics markets. The facility in Pernik is one of three sites where Trelleborg Sealing Solutions specializes in LSR injection molding.

The Germany-based market leader in packaging solutions Multivac is ready to invest EUR 15M into the construction of a new production facility in Bulgaria. Multivac CFO Christian Trauman and Multivac Bulgaria Managing Director Ivaylo Dimitrov met with Bulgaria’s Economy Minister Bozhidar Lukarski in Sofia to present the group’s investment plans in the country and discuss the possibilities of getting Bulgarian government support in the implementation of the investment. Multivac currently has a production and technical service facility in Bulgaria employing 35 people. The company plans to invest EUR 15M in the construction of a new factory for the production of machine parts and components in the Bozhurishte industrial zone, in the western outskirts of Sofia, and create 70 jobs for highly skilled employees. Multivac is a leading provider worldwide of packaging solutions for food, medical and pharmaceutical products as well as industrial and consumer goods with more than 4,600 employees. The group’s product portfolio includes thermoforming packaging machines, traysealers, vacuum chamber machines, labellers, printers as well as components for quality inspection and automation – right up to integrated packaging lines.

A new investment intermediary will work on the Bulgarian capital market, becomes clear from a decision made by Financial Supervision commission. The authority issued license for activity of Matador Prime, an investment intermediary, owned by several Spanish natural and legal entities. The company will be able to start operation, after it proves before Financial Supervision commission that it has the capital that is required and after it makes initial deposit at the Fund for compensation of investors in securities. Matador prime has a capital of BGN 250 thousand. It is the average in size capital, allowed for operation of an investment intermediary. The very company was founded last year. The CEO Voiko Odlazek took part in the board of directors of SEE securities and had a 33.4% stake in its capital. The ex-investment intermediary terminated its activity back in 2010, after the Supervision commission took back its license at its own request.

Deni’ s new ice-cream factory in Debelets is built and its official launch is due. It is built with more than BGN 5 million and only installation of equipment from Italy is expected. According to the ten-year investment programme it will cost about EUR 5 million. The new production facility will have capacity of 60 tons of ice-cream overnight. 60 new jobs will be created. The present ice cream factory in Cholakovtsi has a capacity of 20 tons. Probably the second base of the company will be called Deni-2. Deni’s ice-cream is probably the only one in the market that does not contain hydrogenated fat. This fact is marked on the label from this year. The plant operates with natural sweeteners, made by almond and coconut milk. It is a world novelty- ice cream for vegans, which is lactose-free, has no sugar, no hydrogenated oils and no artificial sweeteners. Another innovation in the company is a new management system for the entire industry - Saphala which covers all aspects of business - from applications and receipt of raw materials to finished products, which is put in the freezer. It produces real-time information for all processes in the company. The ice cream, produced in Turnovo is sold all over Europe. There are requests from Scandinavia, but products will be exported there after the launch of the new factory.

State arms company Kintex is reinventing the market in India. In the period from April to June the company has carried out supplies worth USD 15.3 million for the needs of the defense industry in India. During the period Kintex committed and re-export of weapons to Ethiopia worth USD 175 thousand. Currently the company prepares tenders in response to requests for ammunition and weapons from the Ministry of Defence of Algeria. Expectations are that by the end of the third quarter of 2015, Kintex will deliver arms and ammunition to ground forces of Algeria worth about EUR 6 million. In late July, the commercial attaché of Bulgaria in Delhi Stefan Jonkov said the Bulgarian defense industry finds again the market in India. He noted that companies such as Kintex and Arsenal are actively working to expand its presence in the Asian country, but did not specify what the amount of the contracts and the value of exports of this special production are.

Europe

Britain's Pearson brought an end to its near 60-year ownership of the Economist, agreeing to sell its 50 percent stake in a deal that makes Italy's Agnelli family the largest shareholder in the weekly title. The 469 million pound ($731 million) deal had been expected after Pearson sold the Financial Times newspaper last month to Japan's Nikkei to focus on its education business. The Economist, a famously opinionated advocate of free markets, said the deal would be structured in such a way as to guarantee its editorial independence. Pearson said it would sell its stake to Exor, a holding vehicle for the Agnelli family, and to The Economist Group. Under the terms of the deal, Exor will pay 287 million pounds to increase its stake to 43.4 percent from 4.7 percent and The Economist Group will pay 182 million pounds to repurchase Pearson's remaining ordinary shares. The other shareholders will see their holdings rise due to the group buying back the remaining shares from Pearson, with Rothschild the second-biggest investor at around 27 percent.

America

Symantec Corp. agreed to sell its Veritas data-storage and recovery business to investors led by private-equity firm Carlyle Group LP for USD 8 billion in cash. Other investors in Veritas include GIC, Singapore’s sovereign-wealth fund. The deal underscores growing competition in computer security as data breaches routinely land on front pages and evening newscasts. Symantec helped pioneer the industry with its antivirus software during the 1980s and 1990s. But it has fallen behind as intruders learned how to outsmart its software. It also faces new rivals, including Cylance Inc., CrowdStrike Inc. and FireEye Inc., with different approaches to blocking hackers or alerting customers when they are under attack. Symantec has said it is working on new products to compete with these and other companies, and Chief Executive Michael A. Brown said the sale of Veritas allows Symantec to focus on bolstering its security business.

Asia

Asian shares fell again as China's central bank guided the value of the yuan down against the dollar for a second consecutive day. The People's Bank of China fixed the daily midpoint for the currency down 1.6% to 6.3306 against the dollar. The Shanghai Composite share index closed down 1.1% at 3,886.32 while markets in the rest of the region fell even more sharply. Hong Kong's Hang Seng index ended 2.4% lower at 23,916.02. China's central bank tried to calm market concerns on Wednesday, saying that there was no basis for a sustained depreciation of the yuan given global and domestic economic conditions. Overnight, US stocks had fallen sharply in reaction to Beijing's surprise decision, leading to a negative start to morning trading across Asia. In Japan, the Nikkei 225 index, closed down 1.6% at 20,392.77. South Korea's benchmark Kospi index ended the day down 0.6% at 1,975.47. However, Korean carmakers bucked the downward trend. Strong sales figures for Kia and Hyundai helped shares in both of their companies rose by more than 5%.

The town of Arbanassi

The world-famous old museum town of Arbanassi is located on the high Arbanassi plateau, some 4 km away from the town of Veliko Tarnovo. The specific houses and richly decorated churches, dating back to the 16-18th century, make Arbanassi one of the most original and picturesque towns in Bulgaria, annually attracting many tourists, scientists, archeologists. The place was declared a resort by a royal decree in 1921, and in 2000 it obtained statute of “historical settlement” of national significance. The scarce documentary materials available about the place leave room for various opinions and presumptions regarding the origin, name and population of Arbanassi. Some think it was first settled by Bulgarian boyars, who came here together with their peasants from the farthest western regions, following the victory of Ivan Asen II in the battle in Klokotnitza on March 9 1230, when he conquered the Arbanassi land. Rakovski wrote that Ivan Asen II, after marrying the daughter of the captured sir Todor Komnin, deported a number of Greek families to these places because of her. Arbanassi’s history is rich, and the names of its residents are included in many heroic chronicles. But what has reached us through the years and astonishes us with its beauty, skill, and taste, are the preserved 144 richly decorated houses, 5 churches and 2 monasteries. The two most interesting houses are the Kostantzalieva house and the Hadjidimlieva house. The oldest and most picturesque church in the museum town is Rozhdestvo Hristovo (The Birth of Christ).

On that day:  The Fishermen’s village – Tutrakan