Financial news

According to preliminary data, the reduction trend of the canning companies’ production in Bulgaria continued in 2009, shows the industry report of SFB Capital Market JSC on the development of the sector. Production decreased by 34% compared to 2008 and the turnover of the manufacturers declined by 22%. In 2009 the trend of increase in import continued. Compared to 2008 the increase is by 4.7% and as to 2005 - 2.3 times. Canning industry was one of the few sectors in 2009 to report an increase in export. Compared to 2008 the value of the exported processed and canned fruits and vegetables is up by 7.5%. In 2008 about 56% of the products on the domestic market are from import and 44% are provided by the canneries. For more information and orders see: http://sfb.bia-bg.com

Currently bad credits that haven't been served in 90 days total BGN 13.6 billion, Kalin Hristov, Advisor to the Governor at Bulgarian National Bank announced yesterday at an international bank fair. The fall of Bulgaria's GDP leads to increasing of bad credits and at the same time private external debt of Bulgaria is over EUR 37 billion. According the prognosis of Kalin Hristov the flow of capitals won't reach the level of 45% of the GDP, registered in 2008. Most probably it will range about 5-10 percent, which will raise the price of capital. According to Bulgarian National Bank the prognosis inflation for 2010 will be 2.4%. However, as maintained by macroeconomists, till the moment inflation in Bulgaria is negative, with the exception of tobacco products and fuels.

The National Revenue Agency (NRA) will collect BGN 11.6 bn or over 10% less (BGN 1.42 bn) of the proceeds planned for 2010, BGN 1.7 bn or 13.1% less, compared to 2009. This became clear from the data reported by NRA Executive Director, Krasimir Stefanov, at a seminar in Borovets yesterday. Non-fulfillment of revenues from VAT is expected to be the biggest – BGN 1 bn less than planned, followed by corporate tax proceeds - BGN 294.5 mln less than projected and revenues from additional social security contributions – BGN 254.4 mln less than planned. The NRA collected BGN 4.75 bn or 36.4% of the planned amount for the first five months of 2010, BGN 993 mln less, compared to the same period of last year, Stefanov summarized.

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

Companies

Gas supply talks between Bulgaria’s state-run gas company Bulgargaz and Gazprom Export have stalled, Bulgargaz executive director Dimitar Gogov said yesterday. He said that the outcome of the two parties’ meeting in Sofia last week was “moderately optimistic and moderately pessimistic.” The contract with Overgas, which is 50%-owned by the Russian gas major, to supply one billion cubic metres of natural gas, expires at the end 2010. Bulgargaz was hoping to seal a new deal with Gazprom Export, which currently delivers less than 2% of Bulgaria’s gas. Overgas said a year ago it would enter a direct race with Bulgargaz for the freed gas volumes. Bulgargaz and Gazprom Export are expected to reunite for another meeting in early July.

Amid the raging global meltdown, the bank sector in Bulgaria has remained afloat for quite a long time: no bankruptcies, low arrears percentage, expanding deposit base, moderate (acceptable) profits. The official explanations of the contradiction “small, open economy – stable banks” sounded like that: underdeveloped financial market, currency board, conservative policy of BNB and, the most important of them all, the cautious lending policies of the local players. It turned out, however, that once the real economy had entered the early stages of the crisis, the bank market followed suit, though with a bigger lag.

If Black Sea Highways JSC – Shoumen stops the repairs on Hemus highway the Road Infrastructure Agency will award the repair of another executor. RIA has already sent a formal letter to the management of Black Sea Highways, which explicitly states that in case of refuse to carry out repairs, the company will hold the bank guarantee for advance payment amounting to BGN 340 thousand.

Heat Supply-Sofia has the highest current debts to the state company Bulgargaz. On 1 June - more than BGN 24 million current liabilities, as part of them – BGN 2-2.5 million already paid, announced the executive director of the state gas supplier Dimitar Gogov. According to him Heat Supply-Shumen is in the most severe situation. In the last heating season, they used gas worth BGN 3.5 million, but have paid only BGN 11 000. Heat Supply-Pleven reported a reduction of obligations. From BGN 10 million at the end of April, they are now below BGN 6 million. That is the trend in Burgas company, too. Obligations of Heat Supply-Vratsa are, however, at the level from the previous month and a half or two, show the data of the gas company.

Commission for Protection of Competition (CPC) fined electricity distribution company EVN Bulgaria with BGN 337,347 because of monopoly abuse. The company was fined because it has binded the price for network access with the procedure for buying a cable line of clothing factories Yana. EVN said it would appeal the fine. This is the second penalty for the Austrian company this year. In March the company was fined BGN 250 thousand because it refused to restore power to a property until all bills accumulated by former owner are paid. In 2009 the company was fined BGN 150 thousand because it had installed on a client an auto meter, which shuts down after a certain limit.

Europe

Turkey and Azerbaijan signed an agreement on supplies of natural gas in Istanbul. The agreement covers supplies of gas from Azerbaijan's Shah Deniz 1 and Shah Deniz 2 developments in the south-west of the Caspian Sea. Speaking at the signing ceremony, Yildiz said that 'the two sides reached an agreement on the price and quantity of gas to be exported from the Shah Deniz II project, which will come onstream in 2017, to Turkey.' The minister declined to give figures immediately. Turkey will be able export some of this gas to European countries. An agreement was also reached on the price of natural gas Turkey imports from Azerbaijan, he said. Turkey will retroactively pay for the gas it purchased from 15 April 2008 at new prices.

America

Wal-Mart Stores Inc. said it plans to create 500,000 jobs throughout the world in the next five years, saying there is tremendous opportunity for growth globally. "We need to recruit the best talent and identify the best talent in our ranks," CEO Mike Duke told analysts and investors. It was not immediately clear how many of the jobs would be created in the United States. Wal-Mart also announced a new program to repurchase $15 billion of its shares, which replaces a $15 billion repurchase plan announced a year ago. The company said $10.3 billion in stock had been purchased as a result of the prior program. Duke said growth would not come easily, highlighting such challenges in the next 20 years as higher energy costs, nimble and innovative competitors, and technology.

Asia

Swire Pacific Ltd., the biggest shareholder in Cathay Pacific Airways Ltd., offered HK$9.4 billion ($1.2 billion) for outstanding shares of Hong Kong Aircraft Engineering Co. as travel demand rebounds. Swire will acquire Cathay Pacific’s 15 percent stake in the aircraft maintenance company known as Haeco, and make an offer for the rest of the shares, according to a statement filed to the Hong Kong stock exchange. Swire will offer HK$105 a share, a 25 percent premium to the June 4 closing price. Cathay Pacific, Hong Kong’s largest carrier, will record a profit of about HK$1.8 billion from the sale, which will help fund new planes and the construction of an air-cargo terminal in the city.

Zlata Mogila

Zlata Mogila is a funeral mound, located close to the village of Sadievo, eastern from the town of Nova Zagora. It is one of the biggest in the region. The pit with laid there two hearses – one two-wheeled and one four-wheeled, along with the horses, were found after treasure hunters intervention. The hearses were decorated with hemstitch bronze applications and edgings. One of the shields and the iron rims and naves of the wheels are entirely kept. The grave, which could be related to the funerals of the horses and heares, is situated in the nearby funeral mound. The finding is dated to 1st-2nd century and has belonged to a rich Thracian man who used to live in the region. The mound is located 8 km eastern from Nova Zagora, 1 km away from the road Sofia-Bourgas.

On that day:  Krakra Fortress