Business Industry Capital
Bulgaria
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BNB Exchange Rates
(20.09.2019) |
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EUR |
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1.95583 |
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GBP |
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2.20412 |
USD |
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1.76726 |
CHF |
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1.78289 |
EUR/USD |
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1.1067* |
ECB exchange rate |
Basic Interest Rate |
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as of 01.09 |
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0 % |
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Financial news |
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Foreign direct investment in Bulgaria in the first seven months of 2019 stood at EUR 532.7 million, the equivalent of 0.9 per cent of the gross domestic product (GDP), statistics from the Bulgarian National Bank (BNB) showed on September 19. In the same period of 2018, FDI was EUR 169.5 million, but the original amount reported by BNB last year was EUR 219.9 million, which was revised downward later. Investment in equity, including in the real estate sector, showed a net outflow of EUR 333.6 million (compared to a net outflow of EUR 9.4 million in the first seven months of 2018) and re-invested earnings showed a net outflow of EUR 72.1 million (versus an inflow of EUR 26.5 million a year earlier), according to preliminary data. Receipts from real estate investments by foreign companies in the first seven months of the year totalled EUR 3.6 million, compared to EUR 12.9 million during the same period of 2018.
The current account surplus narrowed by 4.6% y/y to EUR 955.9 mln in July, the Bulgarian National Bank (BNB) reported. The cumulative surplus in January-July amounted to EUR 2.976 bln, up 114.0% y/y. On a 12-month rolling basis, the CA surplus represented 7.7% of GDP. The slight deterioration in the CA balance in July alone was driven by y/y decreases in the secondary income and net services’ surpluses during the month. The secondary income surplus fell by 57% y/y to EUR 155 mln, which we think reflected the serious delays in EU fund absorption. Net services’ surplus dropped by 4.6% y/y to EUR 739.1 mln in July, reflecting falling residents’ income from foreign tourists, transport and other services to non-residents. We think that the worsening of the net services’ balance was expected given the worse tourist season in 2019 and is likely to continue in August and September, as well. The merchandise trade balance returned in the negative territory in July and posted a EUR 8.9 mln deficit. The deficit however narrowed by 89.5% y/y. The annual improvement came as exports rose by 6.4% y/y, following a one-off y/y decrease in July. Imports also returned to y/y growth, but increased at slower pace of 3.3% y/y, which we think reflected easing domestic consumption trends.
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Companies |
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Bulgaria is no longer the second largest shareholder in the International Investment Bank (IIB). After moving its headquarters from Moscow to Budapest, the institution conducted a new round of capitalization of EUR 10 million, making Hungary the second largest shareholder after Russia with 14.72%. The international bank's capital stood at EUR 339.61 million as of September, with Bulgaria's share shrinking from 12.95% to 12.43%. After the move, Russia's share in the bank's shareholding structure shrinks, but even so it remains controlling by 44.18%. The other IIB shareholders, which has existed since the years of the Mutual Economic Assistance Council in the Socialist bloc's years, are Hungary, Bulgaria, Slovakia, the Czech Republic, Romania, Cuba, Vietnam and Mongolia. Its investment portfolio reaches EUR 900 million and its financial result in the first half of this year is EUR 2.87 million. In Bulgaria, IIB has financed projects for EUR 132.7 million and among the companies supported over the years are Eurohold Bulgaria, Eurolease Auto, Sparky Eltos, Prista Oil Holding, Huevepharma, BTC, etc. Source: Capital
Liberalization of the natural gas market starts in October. Until then, amendments to the energy law on the gas part are expected to receive final approval by MPs. This was made clear at the meeting of the Energy Committee at the National Assembly, at which the already refined amendments were adopted on second reading without any major obstacles. The changes make it possible to diversify natural gas supplies, which will subsequently be reflected in price levels. The changes start the gas exchange, introducing the concept of "organized natural gas market". In discussing the changes, MPs hoped that the formation of the natural gas market would avoid the faults in the electricity market. Of course, for the most part the changes will depend on the Rules of Procedure, which will have to be prepared by the operator of the organized natural gas market.
Ektrpack has started the construction of the Veliko Tarnovo Business Center, which will be located next to the company's factory in the western part of the city. The investment will amount to BGN 25 million and the financing is provided by UniCredit Bulbank. The building, which has a total built-up area of 30,268 sq.m, will be constructed by the Gabrovo-based company Lucky Stroy 2011. The eight-story building is expected to be ready in the fall of 2021. The business center will have parking lot with 230 parking spaces, office premises, which will have an area between 58 and 600 sq.m. or a total of 15,000 sq.m. It is envisaged that there will be retail outlets on the first level that will have direct access to the parking lot. Source: Yantra - Veliko Tarnovo
Bulgarian IoT products developer Allterco plans to distribute between BGN 2.5 million and BGN 2.7 million as interim dividend for the first half of 2019. Allterco is planning to distribute part of its reserves formed from share issues, as well as part of its undistributed profit in 2015, 2017, 2018 and the first half of 2019. The company's shareholders will vote on the proposals at a general meeting scheduled for October 25. In July, Allterco wrapped up the sale of five of its telecommunications subsidiaries to Norway's LINK Mobility Group for EUR 7.9 million. Allterco sold its units in Bulgaria - Teravoice, Tera Communications and Allterpay, as well as its Romania-based subsidiary Teracomm RO and Macedonia-based Tera Communications DOOEL. It received 60% of the price in cash and a further 20% is shares in Victory Partners VIII Norway Holding - the sole owner of LINK Mobility Group. The remaining 20% will be paid on a deferred basis within two years. The company turned to a consolidated net profit excluding minority interest of BGN 747,000 in the first half of 2019 from a net loss of BGN 411,000 in the same period of 2018.
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Bulgarian Industrial Association
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World
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Europe |
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France and Germany are agreed on a strategy to respond to a global economic slowdown at a time of international trade problems but differ over how fast to move, French Finance Minister Bruno Le Maire said. French policymakers are growing anxious as Germany, Europe’s largest economy, dithers over how to pull itself back from the brink of recession, and they want Berlin to do more with its budget surplus to engineer a recovery. In a news conference alongside Germany’s finance and economy ministers, Le Maire said the strategy was based on three pillars: “keep reducing public debt where it is necessary. And it is the case in France; keep pursuing structural reforms, as we are doing in France; have budget policies that can take up the baton from monetary policy.” However, Le Maire said that while there was agreement on the approach there remained an open debate on the timeframe for action. Seeking to underline Franco-German economic cooperation, Le Maire said a pilot plant in France to manufacture electric car batteries will go online in 2022, two years before a second factory opens in Germany.
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America |
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US investment fund Blackstone is set to carry out investments of EUR 500 million in Greek hotel properties, starting in the next few days. According to sources, the first acquisition in its Greek portfolio will concern units of a hotel chain with a significant presence in the Ionian and Aegean islands, in a transaction that is expected to come to almost 200 million euros. The current owners of those hotel complexes will retain the management in cooperation with the new stakeholders. For its first purchase of a hotel in Greece the Blackstone Group will use a holdings company based in Luxembourg, which also owns 14 units in Spain. More acquisitions of Greek hotels will follow, with the same sources saying that Blackstone is already involved in talks to this end. The US fund’s interest in Greece is not new. However, people familiar with its strategy say it has become more active now, after the election, as it believes that the new government is “friendlier towards foreign investments and, crucially, will introduce reductions to direct and indirect taxes, which are expected to bolster the competitiveness of the Greek tourism product.” Source: Associated Press
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Asia |
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China’s economic growth risks slipping below the lower-end of Beijing 2019 target of 6% in the third quarter or over the next year, analysts warn, but government economists are slightly more optimistic as they expect stimulus to help stave off a sharper slowdown. Economists believe China’s economic growth likely cooled further this quarter from a near 30-year low of 6.2% in April-June, but they differ on whether the slowing trend could persist despite a raft of government policy measures. Economic activity worsened in August, with growth in industrial production at its weakest in 17-1/2 years, as the U.S.-China trade war dented business confidence, investment and domestic consumption. “There is a risk for Q3 GDP to be below 6.0%,” said Zhaopeng Xing, an economist at ANZ. “But we expect September will see a jump in fixed-asset investment because many gift projects for 70th anniversary will be confirmed to be in the statistics at the quarter end. So we maintain our forecast of Q3 GDP 6.1%,” he told Reuters.
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Indexes of Stock Exchanges 19.09.2019 |
Dow Jones Industrial |
27 094.79 |
(-52.29) |
Nasdaq Composite |
8 182.88 |
(5.49) |
Commodity exchanges 19.09.2019 |
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Commodity |
Price |
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Light crude ($US/bbl.) | 58.62 |
Heating oil ($US/gal.) | 2.0100 |
Natural gas ($US/mmbtu) | 2.5400 |
Unleaded gas ($US/gal.) | 1.6600 |
Gold ($US/Troy Oz.) | 1 512.00 |
Silver ($US/Troy Oz.) | 17.96 |
Platinum ($US/Troy Oz.) | 943.20 |
Hogs (cents/lb.) | 67.95 |
Live cattle (cents/lb.) | 105.82 |
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