Financial news

Managers’ expectations in all sectors of the Bulgarian economy improved the strongest since January, with business conditions perking up 4.4 points in the fourth month after a modest drop in the third, flat in the second and around 3% increase in the first, show data of the National Statistical Institute (NSI). “It’s only by a fraction, but we’re starting to bottom out,” finance minister Simeon Djankov says in a statement. The upswing has spilled into all sectors of the economy including industry, construction, retail and services. Executives in the industrial sector are most upbeat about business conditions, keeping fingers crossed for a rise in output and for more favourable environment both at home and on foreign markets. Average workload capacity in the industrial sector rose to 68.9% in April, the highest since the end of 2008.

The average annual interest rate on newly opened deposits of Bulgarian citizens is just 5.86%, which is their lowest level in seventeen months. For comparison, during six of the past fifteen months the interest rates on deposits were about seven percent, while in another four months of the same period they were over seven percent, hitting a record of 7.23% in May 2009. The average annual interest rate on the most popular deposits in Bulgaria - three-month term deposits in euro, is 5.69%. Finance experts explain the falling interests on deposits with the increasing amount of bank deposits, which has grown to BGN 2.9 billion over the past twelve months.

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

Concessions

The Government adopted a report of the Minister of Transport, Information Technology and Communications Alexander Tsvetkov for the start of preparations for concession of the ports of Varna East, Varna West, TPP Ezerovo, Petrol, Ferry Complex - Varna. Parts of the port for public transport Varna, Burgas-East, Burgas-West, Rosenetz, Nessebar and Terminal 2A, and parts of the port of Burgas will be also given to concessioners. The purpose of granting a concession for this port infrastructure is to attract private capital to operate in the public interest. Thus the sites will become convenient transport and logistical centers for passengers and cargo.

One of the major Bulgarian cement producers Devnya Cement has been granted a 35-year concession for extracting quartz sand from the Cheirite deposit near Varna. The Bulgarian Cabinet granted Wednesday the concession to Devnya Cement after the company conducted the search and exploration of the quartz sand deposit located in Avren Municipality close to the Black Sea coast. Devnya Cement plans to invest BGN 787 000 for the exploitation of the deposit in the first five years. It plans to extract about 80 000 metric tons of sand per year. The Bulgarian government is going to receive BGN 1.23 M per year as part of the concession deal; 30% of the revenues will go to the Avren Municipality.

Companies

Kaolin JSC, whose majority owner, via Alfa Finance Holding, is the businessman Ivo Prokopiev does not declare either the end products under the concession contract, or sales proceeds, according to experts. This is also evident from Kaolin’s official documents, which the newspaper has at its disposal. The company has five concessions for the extraction of kaolin and quartz sand with deposits exceeding 90 million tonnes, evaluated at more than $4.5 bn at current international prices. The concealment scheme is repeated for all the deposits. A comparison between the average price reported to the Ministry of Economy and actual sale prices showed that the company had not declared about BGN 15 mln from all its quartz and kaolin deposits for 2008. This practice began two or three years ago, experts claim.

Sofia, Burgas, Pleven and Vratsa might face hot water shortages in the summer should Bulgargaz cut off gas supply to the heating utilities in the four cities over unpaid debts. Heat Supply Sofia, Heat Supply Burgas, Heat Supply Pleven and Heat Supply Vratsa have accumulated debts of BGN 50 million to BGN 55 million throughout the last heating season. The utility in Sofia alone has accumulated BGN 30 million of debt as additional BGN 100 million have been deferred.

Exporters were the first Bulgarian companies to show signs they are gaining the upper hand over the meltdown, posting higher sales for the first quarter of 2010 compared with a year ago. But experts opinions and the broader economy figures highlight the fact that exports are not enough to ensure overall recovery. Figures released by the National Revenue Agency (NRA) last week revealed that some sectors have suffered deep drops in turnover between January and March, with a 24% decline recorded in the financial sector, 22% in construction, 17% in transport and logistics and 15% in real estate. “Unlike exporters, the broader economy still has a long way to go before it can experience any significant improvement,” said Kiril Garchev, chief dealer at Bulbrokers. He added that exports will spur recovery but will not be enough to get the economy expanding by its full potential.

The number of insolvency cases in Bulgaria for last year have steeped according to data provided by the Bulgarian Ministry of Justice. The Ministry's chief Inspector Neli Madanska said Wednesday that more bankruptcies will come to the fore during this year. So far 477 insolvency cases have been registered for 2007, 509 for 2008 and a total of 790 for the past 2009. Madanska said that a number of insolvency cases have already been submitted to the prosecution, yet most of the businessmen involved no longer have any property to pay off their debts. Hence, according to Madanska the state should set up mechanisms that will allow Bulgarian businessman to announce insolvency on time.

Europe

Greece’s securities regulator banned short selling on the Athens stock exchange for two months from today after shares slumped yesterday and Standard & Poor’s Ratings Services downgraded the nation’s credit rating to junk. “The Capital Markets Commission, taking into account the extraordinary conditions prevailing on the Greek market, decided a ban on short selling on the Athens exchange,” the Athens- based Hellenic Capital Market Commission wrote in an e-mailed statement today. The ban is effective today through June 28, it said. The ASE benchmark general index dropped 6 percent and Greek banks may face further declines after Standard & Poor’s cut their credit ratings along with the nation’s on concern over Greece’s funding crisis.

America

Oil giant Royal Dutch Shell has seen its quarterly profits jump by nearly 50% thanks to higher oil prices. The Anglo-Dutch company said profits for the first three months of the year were $4.9bn - up 49% on the same period last year. Shell said higher energy prices and growth in its business had helped boost profits from "low levels" seen at the end of last year. Profits for the last three months of 2009 were $1.2bn. Those poor results prompted Shell to announce plans to cut 2,000 jobs before the end of 2010, helping to cut a planned $1bn in costs. Shell's chief executive Peter Voser said the turnaround in results for the first quarter of the year were "driven largely by our own actions", citing growth in production and exploration of new oil fields.

Asia

China will place a moratorium on capital raising by real estate firms as part of a broader campaign to rein in property price rises. The move could stand in the way of about 110 billion yuan ($16.1 billion) in share issues planned by 45 companies, unnamed sources close to the China Securities Regulatory Commission told the China Daily. The suspension will allow the authorities to examine whether companies have used illegal methods to manipulate market prices, the newspaper said. Beijing, wary about the risks of an asset bubble, has been trying to cool the real estate market, raising mortgage rates and down payment requirements for second homes and pushing local governments to control speculative buying.

Thracian Sanctuary – Chuchul Summit

This Thracian sanctuary is situated in the highest part of the Chuchul summit (1379 m), in the region of today’s Troyan passage. The Chuchul summit is a crossroad of two paths – one of them leading to the Ad radices station (Kamen most region), and the second one leading to the Troyan monastery. The sanctuary is considered a place of religious cult. During its research, fragments of badly baked ceramic vessels have been discovered. Obviously, the vessels have been prepared for ritual laying. The ceramic material, coins and iron items, which were found, could be dated back to the IV century BC. Two silver antonians form III century AC, as well as a Turkish silver coin from the Late Middle Ages have also been discovered.

On that day:  St. George Rotunda