Financial news

Bulgaria's center-right government abandoned plans on Friday to apply to join the bloc's exchange-rate mechanism, the so-called Eurozone waiting room, over a larger than expected 2009 deficit caused by unaccounted procurement deals, signed by the previous Socialist-led cabinet. “It would be insolent to apply for ERM II and the eurozone given the high levels of the deficit”, Prime Minister Boyko Borisov told a news conference. "We have in fact lied to our (EU) colleagues about our readiness for the euro zone being unaware of this trap." Bulgaria's Finance Minister Simeon Djankov told the same press conference that the country's aspirations to join ERM II will not be rewarded this year.

The Ministry of Finance will held a new auction for government securities today. The state will offer securities with nominal value of BGN 30 million and maturity in February 2017. This is the first tender for government loan note this month and the tenth this year. For the whole year the financial ministry plans to offer government bonds for BGN 740 million on the domestic market. Slightly more than half of newly emissions will be long-term - one of them is today, with seven years term, while others will have a maturity of 10 years and 6 months after issuance. Other government bonds are projected to be medium-term - with a maturity of between 2 and 5 years.

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

Privatization

Bulgaria’s Privatization Agency hopes to complete the sale of state-owned cigarette monopoly Bulgartabac in 2010. This has been announced by the head of the Privatization Agency, Todor Nikolov, who explained that the privatization procedure for Bulgartabac had reached a phase in which the state is preparing its sale together with the consultant it picked in February, Citygroup Global Markets Ltd.  Nikolov also announced that in 2010 the Bulgarian state planned to initiate the privatization of the sizable but troubled military producer VMZ Sopot. In his words, the struggling arms giant will take a while to be privatized because the respective strategy for the it had to be approved by the Parliament first.

Companies

The Bulgarian government has launched an audit of power generators and distributors in a bid to cut spending and lower electricity bills. The government has pledged to keep retail power bills unchanged to cushion the effect of the recession. PM Boiko Borisov, who took office last July, accused the previous cabinets of carrying out unfavourable privatisation deals in the energy sector and sealing long-term power contracts with investors that now affect power prices. "We are not trying to scare foreign investors away. Nothing of the kind. We just want them to treat the Bulgarians as European consumers," Borisov said. In 2004, the Balkan country sold 67 percent in its three power distributors to Germany's E.ON, Austria's EVN and Czech CEZ.

The Bulgarian pharmaceutical market shrugged off recession in 2009, pulling off a 7% increase over the twelve months, Kuncho Trifonov of research outfit IMS Bulgaria told. Drug sales added up to EUR 878 million, with hospitals accounting for EUR 152 million and pharmacies for the balance of EUR 726 million. For 2010, sales are expected to gain a new 5%, taking the market total to BGN 1.8 billion. Trifonov attributed the improvement on the higher purchasing power of the population. The hospital market is not expected to stage an increase this year thanks to continuous pressure by the health ministry to rein in public spending. No growth is expected in terms of sold packages either as sales are increasingly shifting towards more expensive treatment.

Cosmetics maker Alen Mak failed to pay two of the four installments due on its insurance policy with Chartis Europe, Corporate Commercial Bank (KTB), which is custodian of the company's bondholders, said. KTB was notified by the insurer on March 23 that the policy will be declared void unless the payments are made by the end of March. The policy is valid until April 15, 2010. Meanwhile the Plovdiv district court rejected as ungrounded the claim for launching bankruptcy proceedings against Alen Mak. The claim was filed by Doverie pension insurance company in its capacity of creditor after the cosmetics maker defaulted on its coupon payments on two bond issues.

The Bulgarian Alfa Finance Holding sold the majority share package of 58% of the Plovdiv airport to the Danish Nordic Airport Infrastructure ApS. The news was reported Friday by the company's' press office, saying Alfa Finance Holding had decided to focus its investments on its main businesses, which do not include the airport in Bulgaria's second largest city. Alfa Finance purchased the shares in 2007 and since then has been looking for ways to establish a strategic private-public partnership, but all efforts failed. The company further states in 2010 they will focus in investments in clean energy and renewable energy sources through Solarpro and the consolidation of the alternative telecom sector through SpectrumNet.

Europe

Fresh doubts over Greece's ability to meet upcoming debt obligations resulted in record high borrowing costs for the country, ravaging stocks and leading analysts to suggest now was the time to call in EU/IMF support. "It is now up to the Greek government to go publicly to the EU and IMF and ask for the cash and the support; the matter cannot be long delayed," said Chris Pryce, a senior analyst with Fitch ratings agency. Greek bond prices dropped for a seventh day in a row, driving up the yield on the 10-year security to 7.5 percent, a euro area record of 4.5 percent above the benchmark German Bund. Estimates put the borrowing needs of Greek Prime Minister George Papandreou's government at roughly €11.6 billion from now to the end of May, with Athens set to auction a batch of 12-month Treasury bills Tuesday in a crucial test of its capacity to raise funds.

America

Major U.S. banks temporarily lowered their debt levels just before reporting in the past five quarters, making it appear their balance sheets were less risky, according to data from the Federal Reserve Bank of New York. 18 banks, including Goldman Sachs Group, Morgan Stanley, J.P. Morgan Chase, Bank of America and Citigroup, understated the debt levels used to fund securities trades by lowering them an average of 42 percent at the end of each period. The banks had increased their debt in the middle of successive quarters. Excessive leverage by the banks was one of the causes that led to the global financial crisis in 2008. Due to the credit crisis, banks have become more sensitive about showing high levels of debt and risk, worried their stocks and credit ratings could be punished

Asia

Xstrata Plc, the biggest exporter of power station coal, approached a “substantial” shareholder in Macarthur Coal Ltd., joining New Hope Corp. and Peabody Energy Corp. in a bidding battle for the Australian company. “Macarthur advises that it has become aware that an investment bank representing Xstrata has approached one of the major shareholders in Macarthur,” the Brisbane-based company said in a statement. The discussion was “preliminary and highly conceptual,” it said, adding it has no further details. Xstrata may join Peabody, New Hope and Hong Kong-based Noble Group Ltd. in a fight to control Macarthur, the world’s biggest exporter of pulverized coal used by steelmakers, after coal prices doubled and China’s imports tripled last year.

International Aviation and Astronautics Day

The International Aviation and Aostranutics Day is celebrated every year on 12 April. On this day in 1961, Yurii Gagarin made the first human flight in space in the history of civilization. The first Bulgarian to fly in the open space was Georgi Ivanov. His flight was made on 10 April 1979, and lasted two days – until 12 Apirl 1979. Through this flight, Bulgaria became the first nation on the planet to send its representative in outer space. The second Bulgarian-Russian cosmic flight started on June 7 1988, when the Soyuz-TM-5 went into orbit. The second Bulgarian cosmonaut – Alexander Alexandrov, was on the board of the spacecraft.

On that day:  April 12, 1877 – Russia declares war to Turkey