Financial news

The Ministry of Finance is considering the issuance of BGN 2 billion worth of government bonds. This is one of the proposed anti-crisis measures that will be voted by the Parliament. Experts commented that the most likely investors in the bonds are commercial banks, as they have accumulated considerable resource from attracted deposits that they do not venture to grant in the form of credits yet. According to data of the Ministry of Finance, the internal debt amounts to approximately BGN 1.4 billion at present, a little less than 3,5% of the GDP. Meanwhile, the Bulgarian National Bank (BNB) announced that the amount of deposits attracted by banks reached BGN 26.6 billion in February.

Two steps forward, one step back. Metaphorically speaking this was the course of the parliamentary debates on the VAT rise. In the morning, PM Boyko Borissov declared that after all the crucial tax will be upped. According to him, currently experts are estimating how high the VAT leap will be. Borissov explained further that after the government’s anti-crisis measures yield results the tax would be lowered to its present rate while by the end of the cabinet’s term of office it might even be further lowered. He said that he didn’t want to shoulder the blame for this unpopular measure, because his cabinet had inherited serious financial problems from the cabinet formed by President Parvanov. Several weeks ago, experts recommended that the VAT hike, one of the key measures in the government’s anti-crisis package, should be 2 percent.

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

Companies

Certain energy businesses, which do not meet the ecological requirements, would be closed if the EC does not allow an extension for companies to build installations to reduce emissions, said Deputy Minister of Environment and Water Evdokia Maneva. In case of the deadline is not extended, among the first victims are expected to be Brikel, TPP Maritsa-3, etc. The energy sector would apply for derogation to the European Union in order to get about 70 percent free allocation quotas in the next period 2013-2020 so that they become all paid until the end of the period, Maneva added.

The Plovdiv Appellate Court has found no violations in the increase of the capital of the Plovdiv Fair company, which is in charge of Bulgaria’s largest commercial expo. The ruling has created substantial setback for the plans of Bulgarian Economy Minister Traicho Traikov to wrest control of the Plovdiv Fair from businessman Georgi Gergov. On April 19, Traikov filed a law suit with the Plovdiv Court because a probe of his Ministry of the privatization of the Plovdiv Fair company had revealed doubts about violations of the Trade and Privatization Acts. Currently 50.3% of the shares of the International Plovdiv Fair are owned by the Puldin Tourinvest company whose majority share package belongs to businessman, Georgi Gergov. The State has 49.6% while the remaining 0.01% belong to several individuals.

Bulgaria’s Financial Supervision Commission (FSC) has agreed to accept the permit of local insurer Bulgarski Imoti. The company has already transferred the vast portion of its portfolio to Bulstrad Life. Both firms are part of Vienna Insurance Group. Regulatory figures show Bulgarski Imoti had a premium income of BGN 353,000 at the end of February, while Bulstrad Life has accumulated almost BGN 5 million, slicing over 13% off the market.

Global plastic pipes and fitting maker Pipelife will cut the ribbon in May on a manufacturing facility in Botevgrad, near Sofia, said Alex Hairabedian, executive director of the company’s local unit. The project, where building works commence in 2008, will absorb EUR 32.4 million and has already earned the company a Class A investment certificate. The document allows fast-track administrative and other support for the development. The plant will have an initial capacity of 12,000 tonnes of pipes and fittings. It will create 80 jobs, which will grow to 130 once the project is in full swing.

Lukoil Neftochim announced it starts production of diesel blended with 2% bio fuel. According to the EU regulations, Starting May 1, all fuel retailers will be required to blend diesel with a 2% bio component and they pledged to comply with the requirement. Biodiesel contains graft additive, which prevents oxidizing processes in the biocomponents. This ensures consistently high quality of fuel. Using biocomponents in diesel reduces emissions of carbon monoxide, particulate matter, hydrocarbons and toxic compounds in the air. It should be noted that biocomponents contains no sulfur and the combustion in the engine does not emit sulfur oxides.

The Bulgarian pharmaceutical company Sopharma made history by breaking on the Austrian market with a 100 per cent Bulgarian-manufactured drug, Bulgarian media reported on April 29 2010. Traditionally, the German and Austrian markets are considered as two of the most conservative markets in the world, where foreign-made drugs found it difficult to gain approval to be sold on the local markets. The Sopharma drug is called Nivalin. In Austria however, the drug is registered with the trademark Nivaject.

The bad credits eat up bank profits, the data of the Bulgarian National Bank (BNB) show. The share of the credits overdue for 90 days is 7.8% end-March, 2010. As a result of this, the expenditures of the banks on depreciation of assets grows. Despite the made in the first trimester of 2010 depreciation of assets for BGN 285 million as to March 31 the profits of the banks is BGN 170 million. "The bank system in Bulgaria keeps its stability and finishes the first trimester of 2010 with an improved liquidity, with profit and increased assets," the BNB underlines. "Compared to December 2009, the gross capital adequacy is increased from 17.04% to 18.24%. The assets of the bank system amount to BGN 71.4 billion. The BNB made a contribution to the state budget of BGN 354 million," said BNB Governor Ivan Iskrov.

Europe

Spain became the latest eurozone country to suffer a credit rating downgrade, as contagion from the Greek debt crisis appeared to be spreading rapidly. Credit ratings agency Standard and Poor's cut its rating for the euro area's fourth largest economy from AA plus to AA, sending Spanish 10-year bond yields up to 4.127 percent and causing shares on the Madrid stock market to tumble by 3 percent. Only a day earlier the same agency caused widespread financial turmoil when it cut ratings for Greece and Portugal. Greek Prime Minister George Papandreou said the EU "must prevent a fire ...from spreading to the entire European and world economy." Others suggested that the contagion is already well and truly under way.

America

Exxon Mobil Corp. said Thursday that earnings in the first quarter rose 38% from a year earlier as oil prices rebounded. But profits fell short of Wall Street's expectations due partly to higher health care costs. The world's largest publicly traded energy company said it earned $6.3 billion, or $1.33 per share, in the first three months of 2010. That's up from $3.5 billion, or 92 cents per share, in the same period last year. It was the first time Exxon reported a quarterly increase in earnings since the second quarter of 2008, when it posted a record $11.7 billion profit. But Thursday's results were below Wall Street forecasts. "The improvement from the two prior periods was mainly due to higher oil prices," said Fadel Gheit, an analyst who covers Exxon at Oppenheimer Equity Research. "A loss in U.S. refining, higher health care costs and income tax rate were the main reasons earnings were below expectations."

Asia

Japan Airlines (JAL) is to cut 15 international routes, and suspend operations on 30 domestic routes, as part of a reduction in its network. This year JAL expects to reduce international and domestic passenger capacity by 40% and 30% respectively from 2008 levels. The airline is undergoing a major restructuring after filing for bankruptcy protection on 19 January. It is also set to close 11 overseas bases and eight domestic offices. International routes to be closed flights from Tokyo to Amsterdam, Milan, Rome and Sao Paulo. Combined with previously announced route cuts, it means the airline will stop operating 28 international routes, and 50 domestic routes will be shed.

Kiten

The Kiten resort village is situated in Southeastern Bulgaria at the Black Sea seaside, 55 km Southeast of Bourgas and 5 km South of Primorsko. There are two beaches – the Northern (Kiten Atliman) and the Southern (Kiten-South). The Northern is covered in fine sand and is in the inner end of bay. The Southern beach is more than a kilometer long and situated on the Urdovitsa bay. It reaches Kitenska River to the South, which is full of fish. The settlement dates back to VI century B.C. Once upon a time, there has been a Roman fortress in the area, called Urdovitsa. The combination of forest spurs of Strandzha Mountain and the seaside contribute to the special charm of the small resort, which turns into a heavenly place in the summer. Beaches are the main tourist asset of Kiten, which turned it into a resort village and a center for summer recreation. Ropotamo Park is near Kiten. It was declared a reserve in 1940, altered in 1956 and declared a national Park in 1962. It includes the mouth of Ropotamo River and is situated on 847 hectares. Kiten’s landscape is extremely beautiful and attractive. Many tourists prefer Kiten because of the cleaner sea and marvelous forests.

On that day:  The Silkosia reserve