Financial news

Bulgaria’s unemployment rate is 9.62% as of May 28, 2010, announced Labor Minister Totyu Mladenov Sunday. He revealed that according to most recent data about 2.7 million Bulgarians are currently employed, and about 200 000 are self-employed. “Raising the retirement age will have both economic and social effects. If the current trends persist, in 40 years the number of the retired will be higher than the number of employed persons in the country. Still, it is an achievement that we managed to avoid having to raise taxes and insurance payment in this time of severe crisis,” the Minister stated

Bulgaria’s producer prices continued to increase mostly on the back of exporting sectors. While this is a sign that the economic picture is perking up, the conditions for doing business in Bulgaria remain negative, according to figures published on Friday. Inflation in producer prices hit a record 8.1% on an annual basis in April, show data by the National Statistical Institute (NSI). For the month, it sped up to 2.1%. The main driver behind the inflation again was the processing industry, which saw a 12.2% rise, including 42.3% for base metals and 20.7% for tobacco products.

In the first trimester of 2010 a thousand foreign companies have invested capitals in Bulgaria, said Borislav Stefanov - Deputy Director at the Foreign Investment Agency. Only 380 companies have exported capitals but the final data for the trimester shows decrease in the net foreign investments by 22 million euro. The negative investment balance is due to the fact that several big companies have transferred capitals to other branches.

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

Companies

Bulgaria’s state-run gas company Bulgargaz is in talks with Gazprom Export to supply the entire gas volume needed for the domestic market, aiming to offset Overgas’ refusal to renew its contract. Bulgargaz executive director Dimitar Gogov said the decision by Overgas, which is 50%-owned by Russian giant Gazprom, came as no surprise and is in compliance by Bulgaria to remove middlemen in Russian gas deliveries. Overgas’ decision to sell directly to industrial consumers from 2011 could cause Bulgargaz to lose some market share, according to Gogov. “There’s always the risk for us to be ousted from the market in one way or another,” he admitted.

AES Corp., the U.S. power producer with operations in more than two dozen countries, is interested in acquiring Enel SpA’s stake in the Bulgaria’s Maritsa East Three coal-fired power plant. We are considering that investment, said Peter Lithgow, the managing director of AES’s Bulgarian unit, in an interview today. What they have on offer is of interest to us. It all depends on the investment conditions. The Arlington, Virginia-based utility is building a 1.3 billion-euro power plant called Maritsa East One, which is in the Martisa East mining and power generation complex, in southeastern Bulgaria, the biggest investment in Bulgaria.

Czech-owned electricity distribution company CEZ has announced the investment of BGN 4 M in 69 new energy projects in Western Bulgaria. The investment is supposed to improve the quality of electricity supply in 30 cities and villages, including the capital Sofia. The projects include activities such as expansion and rehabilitation of the power grid, laying new electricity cables, replacing old cables, building connections to new buildings. The investment in each of the new projects is up to BGN 400 000. The BGN 4 M allotted for the 69 new projects are part of the BGN 71 M total investment budget of CEZ for 2010, which has been approved by Bulgaria’s Commission for Energy and Water Regulation (DKEVR).

Employees of Moststroy - Veliko Tarnovo JSC and the dairy company CVS Ltd. have finally received their wages delayed for months due to the crisis and reduced orders. After the intervention of the Labour Inspectorate the bridge construction company paid BGN 100 446, and CVS gave to its workers BGN 130 913, announced Nevena Stefanova, head of the Labour Inspectorate in Veliko Tarnovo.

UniCredit Bulbank will distribute its profit as dividends to its shareholders. The decision was taken Friday at the regular annual general shareholders meeting. Despite the difficult economic environment the profitability and efficiency of the bank remained stable. The assets of UniCredit Bulbank reached BGN 11.5 billion, which is an increase of 4.6% compared to 2008. The deposits reached BGN 6.24 billion at the end of 2009. The total loan portfolio of the bank increased with 3.4% on an annual basis to BGN 7.775 billion. ROA and ROE were respectively 1.7% and 12.9%, the capital adequacy ratio is 16.7%. All three indicators are above the ratios for the banking sector in Bulgaria, an announcement of the bank states.

Farmers from the towns of Kazanlak and Karlovo growing the so called “Bulgarian roses” for the production of rose oil for perfumes have warned that the amount of land planted with roses is on the decrease. They have complained that the government has adopted a hands-off policy with respect to the rose production sector, which leaves the rose growers at the mercy of the processing companies. A kilogram of rose leaves is bought for BGN 1.2-1.3 from the farmers, who spend over BGN 100 per decare planted with roses. The state subsidy is BGN 22, which, according to the farmers, is suitable for the grain producers but not for the rose plantations, which are much smaller in size. In 2010, Bulgarian rose oil refineries sell their rose oil to companies in France and the USA for about EUR 4 000 per kilogram; down from the EUR 5 000 last year.

BUSINESSEUROPE: FURTHER UNILATERAL EMISSION TARGETS ARE NOT THE WAY FORWARD

Europe

British energy giant Royal Dutch Shell announced it has agreed to pay 4.7 billion dollars in cash for most assets belonging to US natural gas explorer East Resources. Shell said in a statement that it had agreed to acquire subsidiaries which own substantial amounts of East Resources' business. "Shell has agreed to acquire subsidiaries which own substantially all of the business of East Resources for a cash consideration of 4.7 billion dollars, from East Resources, and its private equity investor Kohlberg Kravis Roberts & Co. and its advisors Jefferies & Company."The transaction is subject to certain regulatory approvals," Shell added. East Resources is a privately-owned business with its primary activity focused on the Marcellus shale rocks in the northeastern United States.

America

Ford Motor Co. is preparing to wind down the Mercury line, created in 1939 by Edsel Ford, after sales plunged 74 percent since 2000, said two people familiar with the plan. The automaker’s top executives are preparing a proposal to kill Mercury to be presented to directors in July, said the people, who asked not to be indentified revealing internal discussions. Mercury, losing two of four models next year, will be starved of products and promotion, the people said. Chief Executive Officer Alan Mulally emphasized the automaker’s namesake brand as he revived the only major U.S. automaker to avoid bankruptcy. The timing of Mercury’s demise depends on how fast executives can convince the brand’s dealers, who also sell Lincoln models, to close or merge with Ford showrooms, they said.

Asia

Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. all increased global vehicle production in April as the Japan’s largest carmakers responded to rising demand in Asia and the U.S. Toyota, the world’s biggest automaker, made 62 percent more cars than a year earlier, producing 591,109 vehicles in April, it said in a statement today. Exports at the Toyota City, Japan- based company more than doubled, rising 117 percent to 150,118 units, while overseas output went up by 55 percent. Production in Japan increased 71 percent. Output at Honda, Japan’s second-largest automaker, increased 27 percent to 294,308 vehicles from 231,399 a year earlier, the Tokyo-based company said in a statement today. Nissan, which ranks third by unit sales among Japan’s automakers, said production of its cars and light trucks surged 57 percent to 319,673 units compared with the same month last year.

Chekotinski monastery St. Archangel Michail

The monastery St. Archangel Michail lies in Botevgrad district, in Lakavishki hill, part of the West Pre-Balkan near the Chekotin neighbourhood, which gave the name of the monastery – Chekotinski. It existed yet during the Second Bulgarian Kingdom. The temple is a monument of culture. Found almost ruined, it was restored in 1820-1830. The iconostasis – worked out and decorated by masters of the Tryavna school, as well as the holy gates and the icons are particularly precious. Legends tell that once the Apostle of Freedom Vasil Levski visited the monastery. It is located some 5 km west of the Bozhenishki Urvich fortress, where the famous inscription of the Sebastocrator Ognyan is kept. In 1991 the monastery burned down but six months later it was restored and expanded. Today, the visitors find here a modern monastery complex with a new chapel – a place for weddings and christenings.

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