Financial news

Bulgaria’s consumer price index shrank by 0.3 % yoy in August 2016, while the monthly data showed no change compared to July, according to data released by the National Statistical Institute. August was the fifth time in the span of nine months that recorded flat CPI and the seventh consecutive month in which the annual index showed deflation. Food prices fell by 0.2% in August and non-food prices were down 0.1%, while services prices were 0.2% higher than in July. In annual terms, food prices were 1.1% higher than in August 2015, while non-food prices were down 1.5% and services prices shrank by 0.8%. The harmonised CPI figure, calculated by NSI for comparison with European Union data, recorded no change on a monthly basis, but the annual harmonised CPI remained in deflationary territory for the 37th consecutive month, having shrunk by 1.1% compared to August 2015.

Bulgaria and Romania may get up to EUR 300,000 in EU financing as co-coordinators of Priority Area 3 of the EU Strategy for the Danube Region, which deals with tourism and culture. Conferring in Bucharest on Monday, Bulgarian Tourism Minister Nikolina Angelkova and Romania's Deputy Prime Minister and Regional Development and Public Administration Minister Vasile Dancu agreed that the two countries will start preparing a joint project for submission to the EU Danube Transnational Programme. The idea is to prepare the project and submit it by mid-October. It will cover a period of three years (2017- 2019). The joint Bulgarian-Romanian Technical Secretariat for the Danube Strategy Priority Area 3, which is seated in Rousse and coordinates tourism cooperation among all Danube Strategy countries, will also benefit from the funding. Bulgaria and Romania have very good relations in a number of areas, and a number of joint initiatives are implemented in the tourism sector.

Companies

Bulgaria has objections to the amount of the interest that Bulgaria’s state-owned National Electricity Company (NEK) will have to pay to Russia’s Atomstroyexport for the reportedly produced equipment for the cancelled Belene NPP in Bulgaria. In June the International Court of Arbitration in Geneva decided that NEK should pay EUR 550 mln to Atomstroyexport. Minister Petkova said that there must have been a technical issue, as “there has been an interest on the interest, making a complex interest – something that is unacceptable according to Bulgarian law”. Minister Petkova went on to explain that the two sides are still discussing different ways for NEK to pay its debt. The amount of the final payment is yet to be precised.

Bulgarian telecommunications company Neterra plans to invest EUR 3 million in the construction of a database centre next year. "We have already decided to build a data centre in 2017 as the current capacity is not sufficient. We will also decide on building another one during the same year," Neven Dilkov, Neterra CEO said at a press conference. Neterra also plans to open an office in Turkey's Instanbul as the company sees vast opportunities for growth in the country's market. Neterra is interested in expansion in Asia and more particularly on the Chinese market. The company plans to launch a new teleport for satellite communications in 2017. Neterra plans to expand in both local and international markets in parallel. It is also looking for acquisitions of smaller companies in Bulgaria and has allocated part of its budget for the purpose. Neterra will launch a portal that will allow its customers to make an order for a specific product within an exact time frame.

Вulgаriа's СВА Аssеt Маnаgеmеnt hаs sаid it рlаns tо sееk shаrеhоldеrs' аррrоvаl fоr а 90% сарitаl rеduсtiоn, tо ВGN 2.02 milliоn. Тhе соmраnу рlаns tо dесrеаsе thе nоminаl vаluе оf its shаrеs tо ВGN 1 frоm ВGN 10 аt рrеsеnt. Тhе рrороsаl will bе disсussеd аt а shаrеhоldеrs' mееting оn Осtоbеr 31. Ассоrding tо СВА Аssеt Mаnаgеmеnt's lаtеst finаnсiаl rероrt, in thе first siх mоnths оf thе уеаr thе соmраnу hаs сlоsеd еight suреrmаrkеts - in Vеliко Таrnоvо, Рlеvеn аnd Strаziса. Тhе соmраnу hаs аdmittеd hаving liquiditу diffiсultiеs but hаs sаid it tаkеs mеаsurеs tо соре with thеm. СВА's first-hаlf nеt lоss widеnеd tо ВGN 1.28 milliоn frоm ВGN 934,000 fоr thе sаmе реriоd оf 2015.

The assets managed by Bulgarian insurance companies grew by 10.3% yoy to reach BGN 6.6 billion at the end of June. The assets of life insurance companies increased by 11.9% on the year to BGN 1.75 billion as of end-June, while the assets managed by general insurance companies rose by 9.7% to BGN 4.86 billion, the Bulgarian National Bank said. Compared to the end of March, total insurance companies' assets were 5.5% higher at the end of June, with life insurers' assets up 0.5% and general insurers' assets up 7.4%. At the end of June, the share of the assets of life insurance companies in the total assets was 26.5%, up from 26.1% a year ago, but down from 27.8% at the end of March. The share of general insurance companies in the overall assets was 73.5%, down from 73.9% at end-June 2015 and 72.2% at end-March 2016.  Among the instruments included in the assets of insurance companies, the proportion of securities other than shares dipped to 49.3% from 49.5% at end-June 2015, the share of deposits fell to 11.4% from 12.9%, while the share of claims from insurance operations rose to 11.6% from 11.0%.

National Company Railway Infrastructure (NRIC) commissioned another contract to Vodstroy 98. The latest order is worth BGN 28.5 million with VAT and was assigned to the incorporation ETC Technology composed of construction companies Vodstroy 98, Hydrostroy, Balkantel and Bonety, says the Public Procurement Register. It's about "electrification of the 83rd railway Simeonovgrad - Nova Zagora." With this contract, the amount provided by the state company to ETC Technology from 2013 onwards exceeds BGN 100 million. The other two selected for such activities associations have little commissioned. Until three months ago Vodstroy 98 was linked to MP Delyan Peevski and in 3-4 years it was assigned contracts for over BGN 800 million. In June the company was sold to Hydrostroy with majority owner Veliko Zhelev. In addition to ETC Technology both companies partnered before the merger in the incorporation that built the North speed tangent.

Europe

Cheaper hotel rooms, summer clothing bargains and cuts in the cost of alcohol helped peg the UK’s annual inflation rate at 0.6% last month. Confounding City fears of a small rise in the cost of living, the Office for National Statistics said price falls had cancelled out increases in the cost of food, air fares and smaller reductions in fuel than in August 2015. Economists had predicted that the annual inflation rate as measured by the Consumer Price Index would edge up to 0.7% or 0.8% in August due to imports becoming more expensive following the post-Brexit drop in the value of sterling. The ONS said there was some evidence that a cheaper currency was pushing up the cost of fuel and raw materials for manufacturing – an early indicator of inflationary pressure – but this had not fed into more expensive prices for consumers. Mike Prestwood, the ONS’s head of inflation, said: “Fuel costs falling more slowly than a year ago as well as rising food prices and air fares all pushed up CPI in August, but these were offset by hotels, wine and clothing leaving the headline rate of inflation unchanged.

America

Bridgewater, the world’s largest hedge fund, has attracted $22.5bn after taking the unexpected step of opening its active funds to new money for the first time in seven years. The move, which was prompted by the launch of a new strategy and a decline in assets due to market losses, gives existing clients a significant increase in their stakes in the fund. The inflows mark a striking contrast to the pattern seen in many other parts of the hedge fund industry, where many funds have experienced redemptions as a result of market losses. It also shows the loyalty that Bridgewater continues to command from many of its clients, in spite of suffering unusually large losses in a flagship fund this year and facing questions about its corporate culture. “I know they’ve had a rough patch with Pure Alpha,” said Robin Diamonte, chief investment officer at United Technologies and a longtime Bridgewater client who added money in recent months. “But it’s unprecedented times, and things are not going to work. With managers like this, you just hold on.” This development is likely to be closely watched across the industry — not least because it highlights the degree to which unusual market conditions and losses are forcing even the most successful hedge funds to shift their strategies.

Asia

China’s economy picked up steam last month, boosted by government infrastructure spending and property sales that are helping to stabilize growth. A slew of data points reported Tuesday—from factory output to retail sales—showed rebounding economic activity in August after a wobbly few months, economists said. Industrial output rose 6.3% last month from a year earlier, accelerating from 6.0% in July, the National Bureau of Statistics reported. The pace slightly exceeded a median growth forecast of 6.2% by 15 economists surveyed by The Wall Street Journal. Investment in buildings and other fixed assets outside rural households climbed a better-than-expected 8.1% from the previous year in the first eight months of 2016, matching the increase seen in the year’s first seven months. Retail sales grew 10.6% last month compared with a 10.2% increase in July, beating a median forecast for a 10.1% rise in August. “There’s all good data from China. It looks like the economy has stabilized somewhat,” said Commerzbank AG economist Zhou Hao. Mr. Zhou and other economists said the brighter picture should allow the central bank to hold off on cutting interest rates and other forceful monetary easing.

Holy Cross Day

September 14 is one of the most important and solemn church feasts. On Holy Cross Day the church makes a pilgrimage to the Holy Honest Christ. The feast marks the transition to the autumn-winter season. On that day the day and the night “cross” – their continuance becomes equal. A strict fast is kept. On September 14 autumn ploughing and sowing start. The legend of this feast returns us to the times when the Christians did not possess Jesus’ cross. In 312 Constantine the Great started with his armies for Rome to liberate the capital from the power of the tyrant Maxentius. The Emperor’s army was far inferior and he prayed God for help. In the night the emperor saw with his own eyes a fiery cross in the sky with the inscription: “In hoc signo vinces” – “By this sign shalt thou conquer”. This prediction turned him to the Christianity and he made the Cross his blazon, profession of Christianity was permitted and the persecutions of the Christians ceased. A few years later queen Helena, Constantine the Great’s mother, went to Palestine willing to find the Holy Cross. Following the instructions of an old Jew, they started digging and found the three Crosses in 326. She built then the Church of the Holy Sepulchre over them, which was consecrated on September 14, 335.

On that day:  Firemen Professional Holiday Silistra