Financial news

The European Commission adopted the 2014-2020 Danube Transnational Cooperation Programme, worth EUR 222 million in total, aimed at strengthening cooperation in the Danube region on Friday. Over EUR 202 million will come from the European Regional Development Fund and EUR 19.8 million from the Instrument for Pre-Accession, the Commission said in a statement. "The programme focuses on boosting innovation and entrepreneurship, preserving natural and cultural assets, improving the connectivity and supporting the shift towards a low-carbon economy in the Danube region," the statement said. It will support transnational cooperation projects in line with the priorities of the EU Strategy for the Danube Region, it added. Its geographical focus includes nine EU countries - Austria, Bulgaria, Croatia, Czech Republic, Hungary, Germany, Romania, Slovakia and Slovenia - and three non-EU countries - Bosnia and Herzegovina, Serbia and Montenegro.

The number of redundant and people who quit their job registered at labor offices increased by 7 percent in June as compared to the previous month, according to the Employment Agency. Thus the share of those who worked until recently, but are now unemployment reached 57.9 percent of all registered in June. The share of redundancies because of mass layoffs increased over the month by 0.1 percentage points to 0.3 percent. The Agency reported an increase of registered unemployed who have previously worked abroad. In June, the number grows to 3% from 2.6% in May. Unemployed registered in employment offices in order to use social assistance and childcare increased as well. Their share increased from 12.9% in May to 14.7% in June. School leavers increased from 0.3% in May to 0.5% in June.

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Companies

InvestBulgaria Agency has prepared new measures to improve the business environment. Some of them are associated with facilities for issuance of investment certificate class A or B, and the rest - with training opportunities for staff. Changes are recorded in the draft rule to the Law on Investment Promotion, which was published for public comment. Currently each investor - Bulgarian or foreign, can get help from the state in several forms - the budget to pay for the construction of a road to the factory or enterprise, the investor can buy municipal land without a tender or to train people on state’s account. Apparently worried by the constant complaints of the business that skilled staff are increasingly difficult to find, the Agency offered changes related to personnel. The idea is the minimum number of people who can participate in training at the expense of the state to fall to 30.

Bulgarian supermarket chain Fantastico said it has invested BGN 12 million in a new store in Sofia, which opened on Thursday. The new store, which covers an area of 4,190 sq m, will create 115 jobs, Fantastico said in a press release made available to SeeNews. Fantastico also said it plans to open another supermarket, with an area of 4,930 sq m, in Sofia by the end of December. Founded in 1991, Fantastico operates 37 supermarkets and an online store for food deliveries. It employs 2,800.

The Bulgarian financial regulator said it revoked the licence of real estate investment trust (REIT) Bulgari Reserve Properties. The Financial Supervision Commission provided no further details in the statement posted on its website. At the beginning of the month the regulator said it opened a delicensing procedure against Bulgari Reserve Properties without elaborating on the reasons. In January 2008, Bulgaria’s financial regulator licensed Bulgari Reserve Properties to operate as a REIT. In 2013, the REIT recorded a net loss of BGN 431,000, according to its latest financial report submitted with the Sofia bourse.

A new pension company in Bulgaria will not operate for now. This is became clear from a decision of the commission for financial supervision for revoking the license of the pension insurance company Utre, which was formed by the major shareholders of Easy Asset Management. The company has not started activity in the term envisaged in the Code for social insurance and thus the license has to be revoked. According to the Code, the pension company that gets license has a period of six months after it starts operation of the license is taken back. Pension insurance company Utre is licensed in July 2014 and for the period it has issued papers in the Commission for financial supervision to get permission for management of funds. Without such permission the company has no chance to collect customers and to work. In May Commission for financial supervision terminated procedure on issuing of a license for a universal fund for a pension company, after it found gaps there. The company considered that it is better to hand out papers again for insurance and voluntary fund rather than complement the old papers. So the application for authorization of the two types of funds was resubmitted, but the response by the FSC was not obtained. A few weeks ago Nedelcho Spasov, member of the board of directors of Utre, said that they the company has not given up its business at that time, though seeing more and more difficulties in it. The original idea of the founders of Utre was to organize a boutique funds for employees and customers of Easy Asset Management (better known by its products under the brand of Easy credit).

10.1 thousand Bulgarian citizens made tourist journeys in the second quarter of the year. Most of them-76% travelled only in the country, while 22.1% only abroad. 1.9% of them travelled both in the country and abroad. This is what preliminary data of NSI shows. As compared to the same three-month period of last year, total number of those who travelled in the country is down by 7%, while number of journey abroad is less by 5.1%, as number of travellers in the country decreased by 7%, while number of those who travelled abroad is up by 2.2%. In the structure of expenditure, the greatest share is held for food-37.3%, as abroad the highest expenditures are allocated for transportation-30.9%. During the analysed period average expenditure in travels with private aim of a single person aged 15 and above is BGN 183.29 in Bulgaria and BGN 574.08 abroad. At the same time expenditures of a single person at a professional travel averaged BGN 165.19 in the country and BGN 973.88 abroad.

Europe

Nato’s eastern European members are displaying “concrete interest” in buying German heavy weaponry, one of the country’s largest defence groups has revealed, as the Ukraine conflict exposes gaps in conventional deterrence. Frank Haun, chief executive of KMW, the Munich-based manufacturer of the Bundeswehr’s Leopard tank, said: “In the eastern EU and Nato countries, there is very concrete interest in the establishment or upgrading of specific capabilities. Nato is aware of the deficiencies in its conventional deterrent capability.” Military action by Russian-backed groups against Ukrainian government forces has started to nudge policymakers back towards weaponry designed to resist a land assault, manufacturers and analysts added. For Rheinmetall, the Düsseldorf-based defence and automotive company that supplies the cannon, ammunition and firing system for the Leopard tank, the Ukraine crisis has also spurred procurement. Rheinmetall said: “Ukraine has given defence a political shove.” Defence sales grew by 18 per cent to €1bn in the first half of this year, while Rheinmetall’s operational loss fell from EUR 52m to EUR 27m, according to interim results published this month. The group is anticipating sales of EUR 2.4bn for its defence division this year, at the upper end of its previous forecast. KMW’s turnover declined from EUR 790m in 2013 to EUR 750m last year, but the company is privately held and does not disclose more up-to-date sales or profit figures.

America

HP's CFO Cathie Lesjak says the company will cut up to an additional 5% more people from its workforce than the 55,000 people it had planned to eliminate. This is a long-running layoff that began in 2012 with an initial target of 25,000 jobs, but grew until the target became 55,000 people. Now it's grown again. Lasjak specified: We are nearing the end of our 2012 restructuring program and 3,900 people exited in Q3. By the end of Q4, we expect to exceed our prior estimate of 55,000 people to exit the company by up to 5% but will not exceed the foretasted GAAP-only charges. This particular layoff will be completed in October and HP expects it to cost $5.5 billion. In June, Lesjak said HP had eliminated a total of 48,000. Doing the math, that means HP has trimmed 51,900 people. After October, HP will be split into two companies and more layoffs could result from that, too. Those cuts will be to "offset" the costs associated with the fact that HP will also be hiring. The two HPs will need two HR departments, two legal departments, two IT departments, and so on. CEO Meg Whitman calls these "dis-synergies" and Whitman and Lesjak have been hinting and warning about layoffs associated with that since last quarter. So far they haven't attached any specific numbers to their plans. Both execs promised to reveal more details about restructuring at the Wall Street analysts meeting on September 15.

Asia

South Korea fired a barrage of artillery rounds into North Korea on Thursday after the North shelled across the border to protest against anti-Pyongyang propaganda broadcasts by Seoul, moves that raised tensions on the divided peninsula. Washington urged Pyongyang to halt any "provocative" actions in the wake of the first exchange of fire between the two Koreas since last October. Both sides said there were no casualties or damage in their territory.North Korea did not return fire but warned Seoul in a letter that it would take military action if the South did not stop the broadcasts along the border within 48 hours, the South's Defense Ministry said. In a separate letter, Pyongyang said it was willing to resolve the issue even though it considered the broadcasts a declaration of war, South Korea's Unification Ministry said. North Korea's young leader, Kim Jong Un, would put his troops on a "fully armed state of war" starting from 5 p.m. on Friday and had declared a "quasi-state of war" in frontline areas, Pyongyang's official KCNA news agency reported. Such language is often used by North Korea in times of tension with the South. A South Korean military official said the broadcasts would continue. Seoul began blasting anti-North Korean propaganda from loudspeakers on the border on Aug. 10, resuming a tactic that both sides had stopped in 2004.

Kavatzite

Kavatzite is the name of a big gulf, located some 4 km south of the popular Black Sea coastal town Sozopol. The name of the gulf comes from the enormous poplar-trees, growing around these places (the Turkish word for poplar is “kavak”, and from there – “kavatzite” pl.). Kavatzite is protected from the northern and western winds by two capes, and the weather there is always calm and quiet. Therefore, in the past the bay gulf was a popular refuge for ships sailing down the Black Sea. Even today, the bed of the gulf is still strewn with rock, lead and iron anchors, as well as ceramic vessels (or parts of them) from the prehistoric, antique and medieval ages. Kavatzite is the only place in Bulgaria, where the sand lily, an extremely rare plant, grows. All attempts to move the plant into other parts of the Black Sea coastal area made so far have failed. In the western part of the beach, a number of mineral springs are squirting.

On that day:  The mound near the village of Svirachi