Financial news

Industrial production in August in Bulgaria slightly improves, as compared to the overall drop registered for both Eurozone and the EU, Eurostat’s data shows. The drop in industrial, mining and utilities among countries in the Eurozone is calculated at 0.5% in August. Yoy, as compared to the same period of last year industrial production in the Eurozone is up by 0.9%. Industrial production across the EU decreased by 0.3% as compared to the previous month of July. On annual basis it is up by 1.9% after growth of 1.8% in the previous month. The largest growth was recorded in Sweden, Greece, Denmark and France. Eurostat reported the most substantial decline in the Czech Republic, Croatia and Lithuania.

The size of the average social security income for the month of August in Bulgaria was BGN 714.91. The average monthly income in the country in the period between September 1, 2014 and August 31, 2015 was equal to BGN 711.07. This means that the average salary, for which insurance is paid by employees in the country, has risen by BGN 3.84 .the set average monthly income in the country for the period is used in the calculation of the size of new pensions in September 2015.

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

Companies

In the end of 2014 market of factoring services in the country is assessed at EUR 1.7 billion, while in 2015 it I s expected to reach 5% growth. The reason for the acceleration of factoring services in the country is increase in exports. In Bulgaria factoring occupies 4% share of the gross domestic product (GDP), while globally it reaches 10%, which means that the local market has significant potential for development. The financial instrument helps in management of financial risk and simultaneously provides necessary working capital for the business. Postbank is the first in market share in the overall volume of factoring services in Bulgaria with 37%, as its share in the export factoring is over 65%. At the end of 2014 the total turnover of factoring services of Postbank amounted to EUR 620 million. For a year the demand for factoring services worldwide grew by 6%. The strongest growth occurs in Europe (+ 8%) and America (+ 8%). According to the analysis of the Bulgarian market about 78% of factoring comes from the domestic market, 20% of exports and 2% of imports.

Swiss agricultural producers show interest in cooperating with Bulgaria, it emerged from a meeting between Agriculture Minister Dessislava Taneva and the Swiss Director of the Federal Office for Agriculture, Bernard Lehmann, The Bulgarian Minister described as a weakness the associating of agricultural producers in Bulgaria and reducing the distance between producers and end consumers. Lehmann noted that there is a need for exchanging information between the two countries, as they experience similar problems. The two committed themselves to work for deepening cooperation between Bulgaria and Switzerland, noting that both share an understanding about how agriculture should develop.

Canadian auto parts maker Linamar Corp will buy France's Montupet for EUR 771 million in a deal that will boost its exposure to manufacturers like Volkswagen and Peugeot. The deal gives Linamar access to Montupet's complex aluminium castings technology. "Montupet and Linamar complement each other very well combining leading expertise in casting and machining," said Montupet's chairman and CEO Stéphane Magnan. Montupet said in September that it had not been affected by the problems faced by Volkswagen, since it supplies Audi-brand V6 cylinder heads to Volkswagen, which are not linked to antipollution standards. Strategically, the acquisition makes a lot of sense for Linamar, as it provides the company significant upstream dies-casting capabilities and expertise, and makes the company a vertically integrated supplier. Montupet serves a number of international carmakers including Renault, BMW, General Motors and Ford. It employs more than 3,200 people, 800 of whom are working in Ruse-based facility of the company. Montupet has been operating in the country since 2006, after it opened a foundry in Ruse. Parts for the nearby factories in Romania for customers such as Dacia и Ford, as well as details for Audi in Hungary are produced there.

Bulgaria plans to increase the state guarantee for the Interconnector Greece-Bulgaria (IGB Pipeline) project by EUR 30 million to EUR 110 million. The final investment decision on the interconnector with Greece is expected to be signed within a month as several technical details remain to be sorted out, which will take two to three weeks. The gas link between Bulgaria and Romania might be ready in the beginning of 2016. A 2 km stretch of the pipeline along the Danube riverbed remains to be completed. The 25 km gas link will connect the southern Romanian village of Comasca with Marten, in northern Bulgaria, under the Danube river. The project includes the construction of a 15.4 km overland pipeline in Bulgaria and another 7.5 km overland in Romania. The IGB Pipeline, which will be 182 km long, will link the northeastern Greek city of Komotini with Stara Zagora in Bulgaria. It is estimated to cost EUR 220 million. The gas link will carry 3 billion cu m of natural gas annually in its initial stage and will have a maximum capacity of 5 billion cu m per year. It will eventually be connected to the Trans Adriatic Pipeline, carrying natural gas from the Caspian Sea to Europe through Greece. The IGB Pipeline is an essential part of a vertical gas corridor connecting Bulgaria, Greece and Romania, which the three countries have committed to develop.

In the beginning of the next year start of a project for construction of a new factory for flexible joints in Dobrich is envisaged. Investment is considered to be between BGN 11 and 12 million. Investor in the new production facility is Bulmat OOD in cooperation with the German-Swiss company Neoper. The start of the construction works was planned for February 2014, but it was put off with 12 months. The reason is that launch of other two projects of the company- construction of two factories in India and China that are out of the country started earlier than expected. The new plant will be built on a site with an area of 36 thousand square meters, which the company bought in 2014. Sofia-based company Barage group is contractor. Bulmat plans completing its project at two stages. At the first stage, construction of a plant for production of flexible joints at an area of 2000 sq.m is planned. The investment in the construction is assessed at about BGN 9 million, while equipment will cost EUR 1 million. The second stage envisages construction of a plant for mass production of hoses and aerators. Bulmat has been on the market for 15 years. The company sells its production in more than 60 countries

The Bulgarian unit of Swedish clothing retailer Hennes & Mauritz (H&M) will open a new store on November 14 in Sliven. The three floor store will be located in Mall Sliven. Its area will be 1800 square meters. H&M entered the Bulgarian market in 2012. With the opening of the Sliven-based store, the Swedish company will have stores in eight towns in Bulgaria.Today the brand has 16 stores in eight cities in the country. In April, H&M Bulgaria launched an online shopping service through which company offers a wider product range. H&M has already entered Veliko Turnovo, Pleven, Blagoevgard. Sales of the Swedish retailer H&M in Bulgaria has plummeted by 37% to EUR 38.5 million for the first nine months of the year.

BUSINESSEUROPE presents Economic Outlook at EU Tripartite Social Summit

Europe

European Central Bank Governing Council member Ewald Nowotny said both headline and core inflation in the euro area are “clearly” undershooting the institution’s goal, signaling that more stimulus may be needed. “One has to say that we’re clearly missing our target,” Nowotny said in Warsaw, pointing to ECB forecasts showing inflation would average 0.1 percent this year and 1.1 percent in 2016. “The main fault for this is the dramatic fall in the price of oil and raw materials. Nowotny’s comments contrast with remarks three weeks ago when he said core inflation points to an “equilibrium” in consumer prices, and suggests that policy makers are becoming more concerned about the outlook for the euro area’s fragile recovery. While he signaled a preference for governments to play a stronger role, his speech is likely to feed speculation that the ECB will step up its own stimulus measures.The euro dropped about half a cent after the remarks and weakened against every major peer. It was down 043 percent at $1.1433 at 2:11 a.m. Frankfurt time, sliding from a seven-week high. Inflation in the 19-nation currency bloc unexpectedly turned negative in September, at minus 0.1 percent, for the first time since the ECB embarked on its 1.1 trillion-euro ($1.3 trillion) asset-purchase program in March. The central bank’s goal is just under 2 percent.

America

The Federal Reserve is giving the gold market a splitting headache. With mounting doubts over when Fed policy makers will raise U.S. interest rates this year, traders and analysts are becoming increasingly divided on where prices go from here. Half of the respondents in a Bloomberg survey expect bullion to drop for a third straight year in 2015, and the rest are predicting a gain. As the outlook got cloudier for interest rates -- which can erode the appeal of holding metals that don’t offer yields -- gold volatility has jumped close to a three-month high. Hedge funds have been befuddled, betting the wrong way on price moves in four of the past seven weeks. Even the two most-accurate forecasters over the past quarter are at odds over what the Fed moves mean for bullion, data compiled by Bloomberg show. “Some people are just going crazy waiting,” said Alan Gayle, a senior strategist for Atlanta-based RidgeWorth Investments, which oversees $40 billion. “There’s a great deal of Fed watching and Fed guessing going on. The uncertainty surrounding the next moves by the Fed make it difficult to assign discounting factors” for gold, he said. Bullion has fallen for five straight quarters, the longest streak since 1997, as the U.S. economic recovery gained momentum and the job market improved, fueling expectations that the Fed would stick with its guidance for higher rates. That picture has been muddled over the past month. Prices on Wednesday closed above the 200-day moving average for the first time since May.

Asia

A survey by a Chinese state-owned investor protection fund showed that investors may be regaining their confidence in the country's turbulent equity markets. Analysts abroad are less upbeat. The latest monthly survey by China Securities Investor Protection Funds (SIPF) climbed to 51.3 in September, up 24.2 percentage points from August, underscoring rising optimism among Chinese investors. China's stock market boom turned to bust four months ago, sending the benchmark Shanghai Composite index tumbling almost 40 percent from its June 12 peak as investors scurried for the exit. Beijing has since unleashed an array of unprecedented measures including a freeze on initial public offerings (IPOs), direct share purchases by state entities, considerations of a market-wide 'circuit breaker' mechanism and the drafting of new rules for commodity exchanges. In recent months, authorities have also intensified its market probe on alleged market manipulation, issuing penalties to stock trading platforms, as well as netting a senior official at the securities regulator, journalists and social media users. The efforts to bolster market confidence seems to be working, according to the survey. The survey found that 28.2 percent of respondents see the Shanghai Composite on an uptrend in the fourth quarter, while 38.9 percent expect the index to be flat over the final three months of 2015. That compares with 20 percent of investors who predict further losses in equities. The remaining said they were unsure.

Aviation and Bulgarian Air Force Day

By a decree of the Council of Ministers October 16th is celebrated as Day of the Aviation and Bulgarian Air Force. During the Balkan War Bulgarian Air Force the pilot Christo Toprakchiev suggested the use of airplanes to drop bombs on Turkish positions. Captain Simeon Petrov developed the idea and created several prototypes by adapting different types of grenades and increasing their payload. On October 16, 1912 in 9.30 AM lieutenant Radul Milkov and observer Prodan Tarakchiev took off with their Albatros F.II. They made a 50-minute flight in the region Edrine-Kadankioy-Papaztepe, and found the dislocation of the enemy army. Two bombs were dropped on the Turkish railway station of Karaagac. They were adapted for manual drop by the observer, and because of their small mass the effect was rather moral. This was the first use of an airplane as a bomber and the first bombing in Europe was done.

On that day:  Bistritsa Babi (Bistritsa Grandmothers)