Financial news

Bulgarian emigrants sent relatives USD 16.289 billion in the last ten years, according to data of the World Bank on remittances from migrants to their home countries and in the opposite direction. According to estimates of the international financial institution, last year alone the amount received from Bulgarians working abroad amounted to USD 1.752 bln, marking an annual growth of 4 percent. Only 5 percent of this amount is due sent out of Bulgaria funds, economists explained. The money actually entering the economy from Bulgarian emigrants is certainly higher because the official figures do not include money that is sent by bus or people. Number one in yearly remittances in Bulgaria remains Turkey. Remittances from Bulgarians living in Turkey accounts for nearly half of all funds sent from abroad. Second and third place are held by Spain and Germany, which have a share of respectively 11.7% and 6.7%.

Coverage of Currency Board amounted to 171.86% at the end of the first quarter of 2016, show calculations based on Bulgarian National Bank (BNB) data. The ratio is calculated taking into account the values of the international reserves of the Central Bank and the monetary base. Information on international reserves comes from the amount of assets of the "Issue" direction of BNB, which is responsible for maintaining the currency board. The articles that fall into the active side of the balance sheet are cash and deposits in foreign currency, monetary gold and other instruments in monetary gold and investments of BNB in securities. In turn the monetary base, located in liabilities of the "Issue" direction represents all notes and coins in circulation issued by BNB and commercial bank reserves at the central bank.

Companies

The gas transmission operators of Bulgaria and Romania, Bulgartransgaz and Transgaz, will sign a contract with Austria’s Habau PPS Pipeline Systems SRL for the construction of the section of a gas interconnection under the Danube river. The signing ceremony will take place on Wednesday afternoon in Sofia, Bulgaria’s Energy Ministry announced. Bulgartransgaz and Transgaz are jointly implementing the project which aims to diversify their gas supply sources and routes. The two companies have been granted up to EUR 8.9 mln for project financing under the European Energy Programme for Recovery (EEPR). In February, Habau won a tender for the construction of the underwater section of the gas interconnector. It is proposing to build the section, which will be approximately two kilometers long, within 119 workdays at a cost of EUR 4.577 mln free of VAT.

Bulgarian poultry producer Gradus invested BGN 15 million in an upgrade of its factory in Stara Zagora. The upgraded factory unit, with an area 16,000 sq m, has a capacity of 50 tonnes per day. It will produce a range of products, including sausages, hams, and pates, among others. The new facility disposes with package lines, equipped with systems for packing of products in modified gas environment. These systems allow lengthening of shelf life of products and maintain the natural flavor, color and texture for a longer period. Gradus is Bulgaria's largest producer of poultry meat. It has its own feed mill, hatchery farms and poultry meat processing plant.

In Pazardzik by the end of the year factory for components that will be built into cars of BMW, VW, Ford, etc will start operation. Arexim will be the investor. It’s one of the few factories with Bulgarian owner, which produce parts for western brands. At present negotiations are being lead with a German partner, which is to acquire stake in the enterprise. Kostal is the company in question, as it has been working together with Arexim for years in Smolyan. Only land and repair of the building will cost around BGN 15 million, excluding purchase of machinery. Plan is by the end of2016 the new enterprise to employ 300 people, while in 10 years time its personnel are expected to reach 200 people. In the end of last year German investor opened its second production base in Smolyan. Arexim produces components of engineer plastics which it delivers to companies of different sectors, including Kostal. The German company produces mechanical and electrical mechanical details for cars and delivers for giants in the industry such as Fiat, Volskwagen and Ford, as well as for luxurious producers such as Bentley, Porsche and BMW, Daimler. In the beginning of the year it became clear that Kostal envisaged BGN 15 million investments in 2016 which is to be directed to construction of new production lines and technological equipment.

Commission for financial supervision registered Arco fund for real estate REIT in the registry of public companies. The decision is real after the company got license for shareholder company with special investment purpose and increased its capital by BGN 150 thousand. Major shareholder and sole owner of the capital is Estonian company Arco Vara AS. Initially paid-in capital was EUR 256 thousand, or about BGN 500 thousand. In February and March 2016 procedure for capital increase by another BGN 150 thousand took place, after which its capital is already BGN 650 thousand.

Bulgarian drug maker Sopharma said its first quarter sales revenue grew by an annual 2%. Domestic sales revenues increased 8% year-on-year in January-March, while exports fell 1%, the company said in a bourse filing. In March alone, Sopharma's sales fell 19% year-on-year, with domestic sales up 17% and exports down 36%. Sopharma's 2015 consolidated net profit dropped 20% on the year to BGN 19.2 million. Its revenues rose 4.2% last year to BGN 876.2 million, but EBITDA (earnings before interest, taxes, depreciation, and amortisation) fell 11.6% to BGN 60 million.

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Europe

The Süddeutsche Zeitung reported on Tuesday that 28 German banks had used Panamanian law firm Mossack Fonseca's services, and at least 14 banks had set up a total of more than 1,200 shell companies. The newspaper reported that Deutsche Bank alone had set up more than 400 offshore companies.The files leaked to the newspaper, known as the Panama Papers, are a massive leak of 11.5 million documents allegedly exposing the secret offshore dealings of a host of world leaders, celebrities and sports stars, implicating figures from Russian President Vladimir Putin to Barcelona striker Lionel Messi. An investigation by more than 100 media groups, described as one of the largest such probes in history, revealed the hidden offshore assets of around 140 political figures. The vast stash of records was obtained from an anonymous source by German daily Süddeutsche Zeitung and shared with media worldwide by the International Consortium of Investigative Journalists (ICIJ).

America

The Treasury Department imposed tough new curbs on corporate inversions Monday, shocking Wall Street and throwing into doubt the $150 billion merger between Pfizer Inc. and Allergan PLC, which was on track to be the biggest deal of its kind. The Treasury move, which was more aggressive than anticipated, sent Allergan’s shares tumbling 19% in after-hours trading and could stall a trend in corporate deal-making that has seen companies searching for ways to escape the U.S. tax net. Pfizer shares edged 0.9% higher. “It’s going to be a major impediment. They’re pretty much taking all of the juice out of inversions,” said Robert Willens, a New York-based tax analyst. “They’ve addressed literally every benefit that one attempted to gain from an inversion and shut them all down systematically.” The new rules, the government’s third wave of administrative action against inversions, will make it harder for companies to move their tax addresses out of the U.S. and then shift profits to low-tax countries using a maneuver known as earnings stripping. In an inversion, a U.S. company takes a foreign address, typically through a merger with a smaller firm.

Asia

India's central bank has cut its key interest rate for the first time this year. The Reserve Bank of India (RBI) reduced its repo rate to 6.5% from 6.75%, in line with the expectations of many economists. The repo rate is the level at which the central bank lends to commercial banks. The latest cut takes interest rates in the country to the lowest level in five years. The RBI cited a fall in inflation for the latest cut. "Retail inflation measured by the consumer price index (CPI) dropped sharply in February after rising for six consecutive months," said Raghuram Rajan, India's central bank governor. The drop came largely from a bigger-than-anticipated fall in vegetable prices. Analysts are factoring in more rate cuts to come, later in the year. Mahantest Sabarad, from SBI Cap Securites in Mumbai, said: "We expect there could be further rate cuts ahead. One of the important data points that the governor had to work with is that there is a normal monsoon forecast ... which is the first preliminary forecast. "Therefore it tells me that there could be another rate cut by 25 basis points sometime during May-July." The central bank's rate cut today didn't come as much of a surprise for anyone.

Kokalyane Monastery

The Kokalyane monastery St. Archangel Michael is also know as the Urvich monastery. It is located in a picturesque region in Plana Planina mountain, about 4 km southeast from the Village of Kokalyane, and some 6 km northeast from the village of Jeleznitza. Originally, it is dated back to the Second Bulgarian Kingdom. According to legends and historical data, it was built in the 11th century, during the ruling of King Samuil. During the Ottoman Yoke, the cloister was set on fire twice. It was completely restored following Bulgaria’s Liberation, and the new church was built in 1896 I nthe place of the old one, which was destroyed in 1858. A famous relic, the so-called Urvich Collection, consisting of laudatory words for Archangels Michael and Gavriil (including the one written by the famous man of letters, Kliment of Ohrid) was found in the Kokalyane monastery. In 1969, the monastery was declared a monument of culture.

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