Financial news

Foreign direct investment in Bulgaria slumped 95% in the first two months of 2010, year on year, preliminary data of the Bulgarian National Bank (BNB) show. Investment stood at EUR 28 million (0.1% of GDP) at the end of February, compared with EUR 555 million (1.6% of GDP) for the year-ago period. Hungary was the biggest investor for the period with EUR 19 million. It was followed by Austria (EUR 10.5 million), Spain (EUR 9.6 million), Germany (EUR 9.5 million) and the UK (EUR 8.2 million). The bottom-line FDI result was smaller than the sum total, because the net direct investment flow from all other countries was negative and amounted to EUR 28.9 million. That was mainly due to the fact that payments on intercompany loans exceeded intercompany loan disbursements, the BNB said.

Bulgaria's economy would mark a 0.2% growth in 2010, reads a report of the International Monetary Fund (IMF). Because of the investment slump, the tightened crediting policy and low economic activity the IMF forecasts further financial difficulties. At the same time private consumption is expected to reduce due to the decreased employment rates. As a result the current account deficit would continue to shrink from 9.5% of 2009 GDP to 6.25% of 2010 GDP. Inflation rates would remain at about 2.2%. Unemployment will rise from 7.8% in 2009 to 9.2% in 2010, IMF reports.

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Companies

The construction supervision of Lot 2 of Trakia highway will be done by Roadinvest Engineering JSC, the Road Infrastructure Agency announced. The offer of the company for the public procurement was defined as the most economically advantageous. The price is BGN 1,124,649. National Unification Transport Axes had offered a lower price (BGN 940 thousand), but the company was disqualified as it had provided insufficient justification to significantly lower its bid. The remaining participants admitted to the procedure are: Routex LTD (ranked second), DZZD MML - TC (3rd place) and DZZD Via Thrace (4th position). The construction works of the Stara Zagora - Nova Zagora section of the highway will be done by union Trace Highways as the construction is expected to begin as early as May.

A five-member panel of the Supreme Administrative Court (SAC) upheld the decision of the Commission for Protection of Competition (CPC) from December 2008, by which Cosmo Bulgaria Mobile SPLTD, supporting mobile operator Globul, was fined BGN 150 thousand. The fine was for the promotional game "100 from 100". By the game Globul was selling the service SMS, supposedly sent by the participation of at least 2 short messages totaling BGn 2.40 for entitlement to try to win a Mercedes.

The right hand of Hristo Kovachki, Nikifor Vangelov, is among the arrested during the special action "Untouchables" of the Interior ministry. Vangelov is equally popular both in business and in sports circles. He is known as the right hand of Hristo Kovachki and Manager of Mining Company. He is a member of the management of other leading companies managed by Kovachki - RUM Denitsa, Fina Mehanika, Nova Denitsa. He is deputy chairman of the Supervisory Board of Municipal Bank and president of football club Minyor - Pernik. Vangelov is known as the man who turns Kovachki energy transactions, and as the financial brain of his empire. Vangelov and the energy boss are relatives as well.

Bulgaria’s Financial Supervision Commission (FSC) has blocked access to the local stock market by Sofia-based renewable energy company Energoni. The move comes just four months after the watchdog gave the green light to its prospectus, thus allowing it to go public. Energoni planned to raise its capital from BGN 250,000 to BGN 547 million though folding in Bulgarian firms including construction company Royal Resorts and energy projects developer Royal Investment. The clean energy firm holds a wind farm patent, an asset whose value was updated three times until it reached the record BGN 547 million. FSC deputy chairwoman Ralitsa Againe said the regulator acted to avoid “the risk of hurting investors’ interests.”

InterCapital Property Development REIT is on track to become the first Bulgarian company to list in Poland after series of failed attempts by other aspirants. A portion of the shares issued through the REIT’s capital increase are expected to list on the Warsaw Stock Exchange (WSE) by the middle of this year, said InterCapital consultant Nicolay Mayster. After on April 14 securing approval by the Financial Supervision Commission (FSC) to augment its capital by 19.3 million shares, the company started translating its prospectus into the Polish language in order to submit it for registration with the Polish watchdog, Mayster said. The process is expected to span one or two months. InterCapital plans to offer on the WSE 6.5 million shares, which account for about a third of the new issue, but the number will be tailored to investor interest, according to Mayster.

Sofia municipality officially asked the state to transfer it back Heat Supply-Sofia heating utility but stripped off its debts to gas supplier Bulgargaz. “We’ll be looking for an option to get back the company only with consumers’ debts,” said Sofia City Council chairman Andrei Ivanov. Heat Supply-Sofia said yesterday that customers’ outstanding bills total around BGN 250 million. The company owes BGN 30 million current debts to the state-run gas supplier, the company said without specifying rescheduled debts. Ivanov explained that it is “in the city’s interest” to leave the utility’s debts to Bulgargaz with the state as they had been accumulated thanks to the “wrong attitude of the former government” and its policy on gas and heating utility tariffs formation. Thus, Heat Supply’s services were offered below their cost price.

Europe

The dairy company Danone has withdrawn requests to approve claims about the health benefits of two of its brands. Danone has promoted that yoghurt drink Actimel strengthens the body's natural defences, while Activia aids digestion. The company says it is waiting for the European Food Safety Authority to clarify how the approval process works. However, Danane is already voluntarily withdrawing the claims from products sold in France. A UK regulator banned an Actimel advert last year. European regulation of such health claims is in transition. Until now, such claims have been decided by the individual national regulator in each European country.

America

Foreclosure filings in the U.S. rose 16 percent in the first quarter from a year earlier and bank seizures hit a record as lenders stepped up action against delinquent homeowners, according to RealtyTrac Inc. A total of 932,234 homes, or one out of every 138 households, received a default or auction notice, or were repossessed by banks, the Irvine, California-based firm said today. In March, filings rose 8 percent to the most in any month since RealtyTrac began publishing reports in January 2005. “The banks are finally working through it,” Rick Sharga, RealtyTrac’s executive vice president for marketing, said in a telephone interview. Unemployed and “underwater” homeowners, or those who owe more than their property is worth, are driving foreclosures. The U.S. jobless rate was 9.7 percent in March, unchanged for a third month. 

Asia

The Chinese economy grew at 11.9 per cent in the first quarter from a year ago, underlining the rapid recovery from the global economic crisis but raising fresh questions about the risks of overheating. The economy grew at its fastest rate in nearly three years and more quickly than economists had expected. The pace of growth puts new pressure on Beijing to consider tougher tightening measures, including appreciation in the exchange rate and increasing interest rates. The first-quarter gross domestic product figures came out a day after the government revealed that house prices increased 11.7 per cent over the past 12 months, the fastest rate since the figures were first published five years ago and prompting new concerns about a potential bubble in the property market. In spite of rising fears of overheating, consumer price inflation dipped to 2.4 per cent last month, from 2.7 per cent in February.

Tarnovo constitution

The Tarnovo constitution was adopted by Bulgaria’s Constituent Assembly on April 16 1879. It included 169 articles grouped into 22 chapters. The Assembly adopted the principle of separation of powers into executive, legislative and judiciary. The Constitution protected civil freedoms, the inviolability of ownership, the freedom of individuals, the equality before law, the right to association, the abolition of class-related rights and slavery, etc. Eastern Roumelia, a short-lived province with its centre in Plovdiv, which survived from 1879 to the Unification in 1885, had an Organic Statute in force. It was developed by a special commission consisting of representatives of the Great Powers and the Ottoman Empire. The Statute provided for strict separation of powers and the Provincial Assembly was at the top of the legislative power. The Turnovo Constitution was the fundamental law of Bulgaria from 1879 to 1947. It was amended twice on 15 May 1893 and 11 July 1911 and it was suspended twice at the time of the Full Powers Regime (1 July 1881 – 6 September 1883) and the 19 May Regime (1934).

On that day:  Maryanski monastery The Holy Transfiguration