Financial news

The Bulgarian government’s proposal to trim the fiscal reserve by almost BGN 2 billion as part of an update of Budget 2010 send out a bad signal to investors but is a logical move given the poor shape of the economy and the alternative for higher taxes. If it makes correct calculations and implements an effective stimulus plan, the Bulgarian government will manage to ward off risk for the currency board mechanism pegging the lev to the euro. This is the consensus among businesses, unions, the opposition and economists. Government sources on Tuesday confirmed  that the Budget 2010 update calls for a BGN 1.9 billion reduction in Bulgaria’s fiscal reserve from the current bottom BGN 6.4 billion to BGN 4.5 billion. They pinned the planned move on the anticipated BGN 2 billion revenue shortage from the target.

The natural gas price is expected to increase by 10-15% after July, predicted yesterday the Chairman of the State Energy and Water Regulatory Commission (SEWRC), Angel Semerdjiev. In his words, the rise in the blue fuel cost is inevitable because of the oil prices on international markets and the fact that the dollar exchange rate continues to climb. In addition, the state-owned Bulgargaz must be compensated for the missed revenues for the first six months of the year. The gas company has not yet submitted its forecasts for the cost of natural gas for the third quarter and its outlook for the price appreciation is based on SEWRC observations, said Semerjiev.

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

Concessions

Latest project for changes of the Law on Mineral Resources provide for switching the mining concessions to entirely to the Ministry of Economy, Energy and Tourism. This will avoid duplicate functions of MEET with the ministries of environment and regional development. The bill will be submitted to the Council of Ministers next Wednesday. The idea is the staff and budget from the other two departments to move to the economic ministry. Meanwhile, it was announced that more subsidies from the state for projects in priority areas will be launched starting 2011 and it does not affect budget 2010.

A decision on concessioning some of the civil airports is expected to be made at today Council of Ministers’ session. The Cabinet will discuss a report of the Transport Ministry on the preparation for seeking future investors. The ministry’s programme on the development of infrastructure projects concessioning of the airports in Ruse, Gorna Oryahovitsa, Stara Zagora and Plovdiv and of the cargo terminals of the airports in Plovdiv and Sofia. On April 28 the ministers voted for concessioning parts of the ports in Bourgas, Varna, Ruse and Vidin. The same procedure is expected to be applied for the proposal for concessioning railway infrastructure units – the Central Railway Station in Sofia, the Poduene Railway Station, the Central Railway Station in Plovdiv and the Central Railway Station in Varna.

Companies

Brunata Bulgaria Ltd. opened a new factory in the industrial zone of the municipality of Rakovski, village of Stryama. The investment in the plant amounts to over BGN 3 million. Its production area is 2,200 square meters. The capacity of the factory allows production of about 2000 substations per year, which are intended for Bulgarian and foreign markets. By the end of the year the first produced substations in the factory will be sent under a contract to the local heat-supply company in Copenhagen.

An association for modern trade will defend the interests of large chains and will contend with informal sector in the industry. The newly founded association includes Billa, Praktiker, Kaufland, Lidl, HIT, Mr.Bricollage and Metro Cash & Carry. The goal is its members' interests to be protected without breaking the principles of competition and free trade. For chairman of the three-member board was elected the manager of Metro Bulgaria - Emilian Abadzhiev. Companies, which the association represents, are large investors with several billion invested in Bulgaria, said Abadzhiev. One of the objectives that the new organization has set is to reduce the gray sector in Bulgaria, he added.

Bulgaria will sell its 33% stake in a power distributor controlled by Germany's E.ON to bolster public finances, economy minister Traicho Traikov said. The centre-right government, which came to power last July, had announced plans to sell state-held minority stakes in 55 companies, ranging from power utilities to arms producers, as part of an austerity package to battle a prolonged recession. "We have decided to start a procedure for the privatisation of the state stake in E.ON," Traikov told a news conference. "We expect the process to take three to five months", adding E.ON Bulgaria had been informed about the sale and backed the plan. E.ON Bulgaria was not available for comment.

Bulgaria’s Sopharma Imoti plans to invest EUR 50 M in an energy-efficient business complex, which is scheduled to be completed in April 2011, the company announced. Sopharma Business Towers will include office and retail property and will be located in downtown Sofia, Sopharma Imoti chief executive director Boris Borisov said at a news conference on Tuesday. The complex will provide 24,000 square meters of offices, 98000 retail units and parking lots.

Europe

European Central Bank President Jean-Claude Trichet has mounted a vigorous defence of the bank's decision to purchase government bonds, insisting he did not give in to pressure from national politicians. Shortly after EU finance ministers unveiled a €750 billion financial rescue package in the early hours of Monday morning (10 May), the ECB indicated its intention to start purchasing "public and private debt securities" as part of the co-ordinated relief effort for struggling eurozone states. "We are fiercely and totally independent. This decision is the decision of the governing council and not the result of any kind of pressure of any sort," the ECB chief said later. The central bank has justified its decision to enter into the sovereign debt secondary market as a necessary measure "to ensure depth and liquidity in those market segments which are dysfunctional."

America

Walt Disney Co.'s profit and revenue surpassed analysts' expectations, as the media giant's TV networks and movie studios outperformed its theme parks. Disney's net income for the three months ended April 3 rose to $953 million, or 48 cents per share, from $613 million, or 33 cents, a year earlier. The prior-year quarter included one-time items that reduced income by 10 cents a share. Sales rose 6% to $8.58 billion, which was more than the $8.39 billion analysts expected. Disney's largest division - TV networks including ESPN and ABC - rebounded 6% thanks to higher fees from cable companies and, to a lesser extent, improving ad sales. Higher broadcast and cable ad sales helped rivals News Corp and Time Warner Inc, which reported record quarterly profits, post strong results last week.

Asia

Japanese auto giant Toyota said Tuesday it returned to the black in the fiscal year ended March and forecast surging profits despite being hit by a massive global recall crisis. The world's largest automaker reported an annual profit of 209.4 billion yen (2.2 billion dollars) and said it expected the figure to soar 48 percent in the current year, despite pulling around 10 million vehicles on safety issues. Toyota posted a net profit of 112.2 billion yen in the three months ended March, the height of the recall crisis, after recording a loss of 765.8 billion in the same period a year earlier. The company's annual profit, helped by cost-cutting efforts and buoyed by stronger domestic demand, marked a turnaround from a loss of 4.4 billion dollars the year before when it sank into the red for the first time.

Official Holiday of Bratsigovo

The town of Bratsigovo lies at an altitude of 420 m in the West-Rhodope part of the Osogovo-Rhodope district, as the Umishka River runs through the town. It is situated 24 km south of Pazardjik, 23 km from Batak and 7 km from Peshtera. During the Bulgarian National Revival the town developed rapidly and the First monastery school was established here in 1831. Today Bratsigovo is a town with rich cultural and historical heritage. There are 9 mineral springs found in the region of Bratsigovo, showing exceptionally good curable features. Besides them and the picturesque scenery, the town attracts tourist with its great number of historical sites. Lots of traces left by Thracians, Romans, Slavs and Bulgarians may be seen here. The clock-tower of Bratsigovo, built in 1885 by the master Ivan Dragov, is the highest one on the Balkan Peninsula. There are six protected areas on the territory of Bratsigovo municipality. Bratsigovo lies near the famous Wondrous Bridges, Starosel, and the Bachkovo monastery. In connection with the April Uprising from 1876, the town of Bratsigovo has its public holiday on May 12. At the beginning of May the Uprising in the Fourth Revolutionary District was suppressed and drowned in blood. The leaders of the Uprising who survived the slaughters headed to the Balkan Mountains. On May 12 after being betrayed, Georgi Benkovksi was killed in the Teteven Balkan. It was only Bratsigovo of all insurgent Rhodope towns that survived the massacre.

On that day:  Stobski Pyramids Hisarya