Financial news

Bulgaria’s Producer Price Index on Domestic Market in July 2015 has decreased by 0.5% compared to the previous month. The domestic prices fell in the manufacturing - by 0.3%, in the mining and quarrying industry and in the electricity, gas, steam and air conditioning supply - by 0.8%. In the manufacturing, compared to the previous month, the prices went down in the manufacture of basic metals by 1.8%, in the manufacture of fabricated metal products, except machinery and equipment and in the manufacture of electrical equipment by 0.4%, while a price increase was reported in the manufacture of textiles by 0.7%, in the manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials and in the manufacture of rubber and plastic products by 0.5%. Producer Price Index on Domestic Market in July 2015 has decreased by 0.7% compared to the same month of 2014. The domestic prices fell in the manufacturing by 3.2% and in the mining and quarrying industry by 0.7%, while prices increases were registered in the electricity, gas, steam and air conditioning supply by 3.8%. In the manufacturing compared to July 2014 the prices fell in the manufacture of fabricated metal products, except machinery and equipment by 0.9%, in the manufacture of other non-metallic mineral products by 0.8%.

Bulgaria's finance minister said he expects that the country's economic growth will speed up to 2% in 2015 from 1.7% in 2014. "The economy is doing better than our initial projections under which the budget for this year was planned. We expect this trend to continue", finance minister Vladislav Goranov said. The country's state budget for 2015 sees economic growth at 0.8%. The growth rate of private consumption is still unsatisfactory but bigger government expenses planned for the second half of the year should have a positive impact on the economy, Goranov noted. In his view, in order to achieve higher growth Bulgaria should undertake structural reforms, mainly in the judiciary. Goranov also said he expects budget revenues at the end of the year be up to BGN 1 billion higher than planned in the state budget, largely due to better tax collection.

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Companies

The mining industry generates 5% of Bulgaria’s GDP and provides jobs for over 24,000 people, according to Energy Minister Temenuzhka Petkova. She noted that around 300 companies operated in the sector. Petkova handed to the chief executives of Asarel-Medet AD two awards issued by the Energy Ministry in recognition of the contribution of the company to the development of the mining industry. She said that Asarel-Medet AD had paid concession fees amounting to BGN 70 mln, VAT excluded from 1999 until the end of the first half of 2015. Petkova added that the company had contributed over BGN 6 mln in concession fees to the budget of the Panagyurishte Municipality over the past two years and a half. Bulgaria’s Energy Minister also said that in 2014 the mining sector had injected slightly over BGN 70 mln in concession fees in the state budget, while in the first half of 2015 the figure stood at BGN 66 mln.

The Bulgarian state may start financing the participation of small and medium enterprises at fairs and exhibitions under the OP Innovations and Competitiveness 2014-2020. Executive Director of the Bulgarian Small and Medium Enterprises Promotion Agency Marieta Zaharieva announced at the conference themed Opportunities for Encouragement of the Small and Medium Business. The financing may be a fact under a new project of the agency with which it will apply under the operational programme next year. The measure will be focused on companies that do not have the means and readiness to attend such events abroad. In addition, the agency will establish a regional network with the purpose to be closer to the business. There will be six regional offices, which will also cooperate for connections between the big and the small companies.

The number of passengers using the services of the Bulgarian State Railways (BDZ) company has dropped by over 1 million, or 9%, over the past year. The passenger volume reported by the state-owned railway carrier shrank by over 1/3 in 10 years, according to statistics of the National Statistical Institute (NSI). BDZ reported a year-on-year decrease by 7.6%, or 489 000 passengers less, in the period April – June 2015, a time when the number of trips normally goes up. In the first half of 2015, a total of 11.3 million people traveled by train, down by over 1 million from H1, 2014. Meanwhile, the number of passengers traveling by bus keeps growing. In the second quarter of 2015, over 109 million people used the services of bus companies, up by 1.2% from the same period of 2014. The market share of state-owned railway carrier BDZ shrank to 5.1% as a result.

Romania's financial supervision authority, ASF, said the action plan submitted by non-life insurer Euroins, a subsidiary of Bulgaria-based Eurohold, failed to comply with the adjusting requirements resulting from a stress test and must be amended. The initially submitted action plan indicates, as essential aspects of rectifications following the Balance Sheet Review (BSR) and Stress Test, two share capital increases of RON 100 million (EUR 22.5 million), on December 31, 2015 and June 30, 2016, and a new reinsurance contract for civil liability insurance for car owners, ASF said in a statement last week. The deadlines proposed for the capital increases exceed the three-month term after the publication date of the BSR results, which expires on October 15, and the total amount indicated by the undertaking is insufficient to restore both the equity deficit (Solvency I) and its own funds (Solvency II), it added.

А section of an underground transport line to mine Varba-Batantsi in Rudozem was officially opened by Energy Minister Petkova. The event was attended by Deputy Minister of Energy Zhecho Stankov, Chairman of the Board of Directors of Minstroy Holding Nikolay Valkanov and rector of the Mining and Geology University prof. Luben Totev. "The underground link between deposit Varba and flotation plant in Rudozem is a key project that will minimize the cost of transportation of ore and will ensure the protection of the environment," said Petkova. The project investment is worth BGN 5 million.

Europe

Switzerland's real GDP rose in the second quarter of 2015, according to the latest report from the State Secretariat of Economic Affairs (SECO) released on Friday. Economic output in Switzerland revealed a 0.2% increase in the reported quarter, following a 0.2% decrease reported in the first quarter of 2015. Market consensus had bet on a 0.1% decline which would have seen the nation enter recession. On an annual basis, GDP rose 1.2% in the second quarter, the same as the revised 1.2% growth seen in the previous quarter and above analysts' projections of a 0.9% rise. "The balance of trade in goods made a positive contribution to GDP growth because imports fell more than exports; on the other hand, the balance of trade in services had a negative impact. Consumption expenditure by private households and government together with investments also provided support for GDP growth in the 2nd quarter of 2015," SECO wrote in a statement. Swiss exports sank by a nominal 2.6% in the first half of this year. Deliveries to the euro zone, which account for 44% of all sales abroad, dropped 8%.

America

U.S. retailers including Toys R Us are starting to negotiate with their Chinese suppliers to take advantage of lower manufacturing costs after China devalued the yuan, with many saying they want to be ready if currencies in China and other Asian countries drop more against the dollar. Earlier this month, China devalued its tightly controlled currency in an effort to boost growth and help flagging exports. The nearly 2 percent cut on Aug. 11, the most significant downward adjustment to the yuan since 1994, will make imports from China cheaper. The Chinese currency is down 3.2 percent versus the dollar so far this year. The cheaper yuan offers the chance for retailers to buy more with dollars, with a knock-on effect in other supplier nations eager to remain competitive. After China's move, Vietnam devalued the dong by 1 percent while the Malaysian ringgit dropped to a 17-year low, its largest one-day loss in almost two decades.

Asia

Corporate Germany is showing the first impact of market turmoil spreading from China, weeks after delivering solid second-quarter earnings. Falling sales of German cars and machines in China during the first half of the year could presage more pain to come, analysts said. A component of the closely watched Ifo business-sentiment survey released Tuesday also hinted at dimming prospects for Europe’s largest economy, even as the broader Ifo survey beat expectations. Ifo’s measurement of German business-managers’ outlook for the coming six months edged down to 102.2 in August, from a downwardly revised 102.3 in July. Overall business sentiment rose slightly to 108.3, from 108.0 a month earlier. The survey doesn’t capture the global reverberations of China’s recent market plunge. More than half of the 7,000 businesses questioned responded earlier in August, before turmoil on global markets, Ifo survey director Klaus Wohlrabe said.

Mantaritsa

The biosphere reserve Mantaritsa has preserved the most magnificent coniferous forests in Bulgaria. They resemble a jungle and are mostly impassable. The most common trees in Mantaritsa are the spruces, followed by fir-trees and white pines. The average age of the trees is 130-150 years. The fauna is very rich as the most interesting species are wood-grouse capercalzies, bears, red deers, wild boars, roes and wolves. Pashino Peak is situated in the western part of the reserve. The remains of an ancient fortress can be found there. The wall is over a meter wide and is of preserved height of 150 sm. The fortress surrounds an interesting 5-meter high rock. There are four platform-grounds on the rock, which purpose is still unknown. A marvelous view to the Rila Mountain and part of the Rodopi Mountains appears on the top of the rock. The highest peak of the Batashka Mountain – Syutkya, rises over Mantaritsa. Lepenitsa Cave, one of the most beautiful caves in Bulgaria, can be found at the foot of Syutkya.

On that day:  National Museum Radetski Steamship St. Alexander Nevski Cathedral – Sofia