Financial news

At a national scale, it is very probable that proceeds from the Customs Agency for 2016 will exceed by BGN 2 billion proceeds for 2015. This is a good result and it will allow us to reduce the budget deficit to zero, stated Finance Minister Vladislav Goranov. The implementation of the budget by end-September marked a surplus of BGN 3.4 billion but with palpable lack of fulfillment with respect to the expenditures part. The Budget Act provides for a deficit of 2%.

The legislative initiative for an EU-wide instrument, European DRF Report, which will replace the existing monitoring tools such as the Cooperation and Verification Mechanism (CVM) for Bulgaria and Romania, was adopted by the European Parliament on Tuesday. According to the proposal, every year, the European Commission, in consultation with an independent panel of experts, would draw up a “European Democracy, Rule of law and Rundamental rights Report” on the state of democracy, rule of law and fundamental rights in all member states, including country-specific recommendations based on indicators such as the separation of powers, freedom and pluralism of the media and access to justice. The legislative initiative was passed by 405 votes to 171, with 39 abstentions.

Companies

Bulgaria occupies the top position among 10 selected European countries in attractiveness criterion for the automotive industry. This is evident from the study of Соllіеrs and Automotive Cluster, conducted in late 2016 among the representatives of the industry in the country. The ranking established for the purposes of the study, except Bulgaria and Romania, include Hungary, Poland, Czech Republic, Spain, United Kingdom, Italy, France and Germany. The countries are ranked according to an index consisting of weighted positions for each country from the list. Weights of individual factors are determined based on the responses of respondents in the "Reasons for choosing Bulgaria". The lower the index, the better the conditions provided by the country. Another thing evident from the report of Соllіеrs and Automotive Cluster, is that in Bulgaria there are about 100 large companies that produce components for nearly every brand of international automobile industry.

Central Energy Repair Base was selected to supply sensors for Sensata Technologies’ Bulgarian representation company. Sensata, which is present in 11 countries on four continents, produces automotive electronics and will use sensors to test the vibration and noise in their laboratories. CERB was selected a partner to Sensata as a Bulgarian representative for PCB Group - the largest manufacturer of sensors in the USA with branches in 60 countries worldwide. Sensata is on the Bulgarian market since 2011 and the country is the third largest location of the company. The company produces in Bulgaria high temperature sensors and pressure sensors for the world's largest automobile groups Volkswagen, Daimler, Volvo, Fiat and GM. In addition to automotive sensors PCB Group also produces for the aerospace, defense, marine industry, and energy and power generation.

The most dynamic company among the small and medium-sized Bulgarian companies last year is from the sector of engineering and production of components for the automotive industry. This shows the tenth edition of the Gepard ranking of Kapital. This year, the rankings includes 1500 small and medium-sized companies from all sectors of the economy, which makes the publication a catalog of small and medium business. The winner has over 4000% revenue growth last year, while the average growth of all companies in Gepard is over 70%. They employ nearly 140 thousand people and have earned a total of about BGN 21.4 billion, which was nearly 25% of gross domestic product in 2015. Their net profit was BGN 1.5 billion. Besides external markets, a growth factor is also the domestic consumption. Over the past two years, many companies enhanced their investment plans, which is also stirred the growth. In Sofia are based almost 45% of the companies in the ranking, they form over 47% of the total revenues of all SMEs.

The deadline for the exploitation of the fifth unit of the Kozloduy Nuclear Power Plant has been extended until 2047. The meeting was also attended by Bulgarian Energy Minister Temenuzhka Petkova. The two units of Kozloduy NPP produce 33% of the energy in the country. Petkova stated that extending their operation is one of the priorities in the energy sector. “Extending the service life of unit 5 and unit 6 will guarantee consumers access to electric energy at competitive prices. It will also guarantee the competitiveness of Bulgarian businesses,” added the minister. With respect to the arbitration case regarding the Belene NPP, Minister Petkova announced that she expects Bulgaria to pay Russia the full amount owed by the middle of December.

Bulgarian car battery maker MonBat said on Tuesday its January-September consolidated pre-tax profit grew by 7.6% year-on-year, reaching BGN 21.6 million. MonBat's consolidated earnings before interest, taxes, depreciation and amortisation increased by 8.7% on the year to BGN 33 million for the nine-month period. Consolidated net sales revenues increased by 1.4% year-on-year to BGN 179.4 million for the nine months ended September 2016. In September alone, the company's pre-tax profit rose by an annual 2.6%, reaching BGN 2.1 million, and EBITDA jumped 9.1% to BGN 3.6 million. Net sales revenue increased 18.9% to BGN 25.4 million. MonBat shares closed at BGN 7.887 on the Bulgarian Stock Exchange on Tuesday, down 0.14% from the previous close. MonBat operates four plants for manufacturing and recycling of lead-acid batteries, diodes and light-emitting diode luminaires.

Europe

Troubled Italian bank Monte dei Paschi di Siena unveiled Tuesday a restructuring plan that will include new management, thousands of job cuts, hundreds of branch closings and the disposal of soured loans in a bid to entice investors to inject up to EUR 5 billion in new capital. Under the new three-year plan, the capital increase will be conditional on the disposal of EUR 28.5 billion in bad loans, the bulk of which will be bundled in a separate fund at a price equal to 33 percent of current value. Both the capital increase and the bad loans disposal are to be completed by the end of 2016, "assuming market conditions are there. It would be the bank's third recapitalization in three years as the bank seeks to recover from losses on complex investments and soured loans. Some 2,600 jobs will be cut and 500 branches closed. Shareholders are to vote on the plan on Nov. 26. The bank forecasts net income of EUR 1.1 billion in 2019. In the first nine months of this year it lost EUR 849 million, mainly due to EUR 750 million in provisions for loan losses. Shares in the bank, which rallied ahead of the new plan, surged by as much as 20%, to EUR 0.41, before being suspended for excessive volatility.

America

Activity in the US manufacturing sector registered a surprise increase in September, according to preliminary data released on Monday. In a report, market research group Markit said that its flash manufacturing purchasing managers’ index (PMI) rose to 53.2 in October from the prior month’s final reading of 51.5. Analysts had expected no change to September’s reading. On the index, a reading above 50.0 indicates expansion, below indicates contraction. Markit noted that the data showed the strongest upturn in business conditions for 12 months and that both output and new order growth hit one-year peaks. The market research group added that manufacturers had reported the fastest expansion of input buying since June 2015 and that input cost inflation had accelerated to its strongest in almost two years. “Manufacturing showed further signs of pulling out of the malaise seen earlier in the year, starting the fourth quarter on a solid footing,” Markit chief economist Chris Williamson commented. Williamson further noted that there were signs of manufacturers building inventories which should provide an extra boost to the economy in the fourth quarter.

Asia

Chinese conglomerate HNA Group plans to buy a roughly 25% stake in Hilton Worldwide Holdings Inc. from Blackstone Group LP for $6.5 billion. Under the terms of the deal, which will reduce Blackstone’s interest in Hilton to approximately 21%, HNA will pay $26.25 a share in cash for the stake, a 15% premium to Hilton’s closing price of $22.91 on Friday. The move comes as Hilton is expected to later this year split into three distinct entities, the result of a plan to spin off a chunk of its hotels into a real-estate investment trust and to separate its timeshare business. The HNA-Blackstone transaction is expected to close in the first quarter of 2017, and HNA will own approximately 25% of all three companies. HNA earlier bought 100% stake in U.S.-based Carlson Hotels Inc. in April and is also in the process of completing the $6 billion acquisition of Ingram Micro and an around $4 billion purchase of CIT ’s leasing arm.

St. Dimitar’s Day

Dimitrovden (Dimitar’s Day) is in honour of the martyr Dimitar from Thessalonica. He was born in the 3rd century in the times of the last persecutions of the Christians in the Roman Empire. He frankly professed the new religion and for this on 26 October 306, when the Emperor visited Thessalonica, he was thrown to dungeon and speared at the Emperor’s command. After some time believers built a temple over this grave, which had become famous for the miracles it caused. In icon-painting St. Dimitar is presented as a horseman saint, riding a red horse with a spear in his arm, with the one he spears the Roman commander. According to the national celebrations St. Dimitar’s Day is also known as Mitrovden or Razpus. This day marks the end of the summer period and then the shepherds, herdsmen and farm-hand are paid and “liberated”. “St. Dimitar brings winter and St. George – summer.” The Bulgarian saying is that the first snowflakes fall from his beard. With 'Dimitrovden' the season of weddings and engagements starts. Traditionally, a meeting is arranged between the young people of the village with a view to marriage. On 26th October the lads choose their prospective wives from a group of maidens who perform a special national dance called “horo”. On the day of St. Dimitar, name day celebrate all those named Dimitar, Dimitrina, Mitko, Dimo.

On that day:  Sliven