The Dow Jones Industrial Average saw its blackest week in history plummeting to a five-year low of 18%.

The S&P 500 nosedived by over 18%, its biggest weekly drop in 75 years, and the NASDAQ tumbled 15%.

MSCI World dove to an unprecedented low erasing 20% of its value, the lowest since it was established in the 70’s.

The Nikkei 225 shed 24%, twice as much as it lost in the week of the Black Monday twenty years ago.

Australia’s AOI also brought back memories of the Black Monday eviscerating over 15% of its value.

Germany’s DAX-30 and France’s CAC40 crumbled 22% as London’s FTSE100 ended the week down a staggering 21%.

The crash did not spare the stock markets in Central and Eastern Europe forcing local bourse operators to halt trading in an attempt to calm down frenetic investors.

No real deals were struck on the Bucharest Stock Exchange on Friday, and still the indexes slumped to four-year bottoms with BET of the blue chip companies shedding 9.93% and BET-FI, which tracks regional funds, losing a new 14%. The two indices wiped out a respective 27 and 44% of their value over the week.

Wiener Borse and the local financial watchdog changed the stock market rules to allow suspension of trading in all financial instruments whose value moves by 10%, and banned short selling. On Friday, the ATX plummeted by a record 11% with Raiffeisen International, Erste Bank and Vienna Insurance closing 15% in contraction territory.

Trade was again suspended in Russia as wild volatility froze deals on the MICEX and RTS stock exchanges. Prime minister Vladimir Putin even said on Friday the government would pump USD 6.7 billion into the stock markets to prop up the main blue chips, and yet the global depositary receipts of Gazprom and Lukoil slid to record lows since 2003, Bloomberg reported. Investors have pulled out USD 615 billion from the Russian bourse since May.

Panic also continued to rule on the Slovenian and Croatian equity markets evaporating a respective 6 and 10% from the SBITOP and Crobex indices.

In the meantime, the main indices in Serbia and Macedonia lost a humble 2%.

(Dnevnik)

Natural gas and electricity bills in Bulgaria should be slashed following the 40% drop in oil prices, Lukoil president Vagit Alekperov told Nova Television.

Alekperov said all industries that tied prices to oil should reduce tariffs by 30-40%, and labeled the price hike in Bulgaria an unnatural process.

The cost of fuel Bulgarian gas company Bulgargaz buys from Russian giant Gazprom hinges on the price of black oil and gas oil nine months back and the US dollar. Other factors are the expected consumption and the quantities pumped to different suppliers.

While oil plunged, natural gas in Bulgaria jumped by 23.89% as of October 1 as the energy regulator put prices on hold.

Alekperov forecast oil prices will hover in the region of USD 70 and 100 a barrel next year, and are seen at USD 105, 90 or 80 by 2013.

(Dnevnik)

Bulgarian fuel trader Gastrade and Bulgarian-Romanian joint venture Unitranscom were awarded railway freight transportation licences.

They will compete on the market with Bulmarket, Bulgarian Railway Company and BDZ, the Bulgarian national railway carrier.

Unitranscom is owned by freight railway car maker TransWagon and Romanian railway freight carrier Unifertrans.

The company plans to transport freight of chemical fertilisers producer Neochim and Mini Cherno More mines, which carries coal to the heating utility in Sliven, central Bulgaria. From 2010 it will target chemical companies and offer international freight transportation.

Unitranscom will start off with ten trains by the end of the year, and later on run twice a week.

Simeon Ananiev, executive director of the railway administration agency, said the freight railway carriers should have at least one contract within six months from getting the permit.

The other licensee, Gastrade, controls 30% of Bulgaria’s propane-butane, petrol and diesel exports.

Admitting new players to the market will help create a competitive environment and liberalise the market, commented transport minister Petar Mutafchiev.

State-run BDZ raised as of July its tariffs by between 8 and 12% after reporting smaller freight volumes for 2007 it blamed on competition with private players.

(Dnevnik)

German company Degi has acquired the big-box shopping centre Mall of Sofia, said the anti-trust authority, which should rule on the deal.

Sources told Dnevnik daily that Degi Deutsche Gesellschaft fuer Immobilienfonds was also a bidder for the capital’s City Center Sofia but lost to U.S. company Heitman, which offered EUR 101 million.

Degi’s marketing director and press spokesman Dietmar Mueller declined to comment until the deal was wrapped up.

No financial details or yield about the new sale are available. City Center Sofia was sold at a 7.1% yield.

In 2006 Mall of Sofia went to the hands of Irish investment fund Quinlan Private and GE Real Estate from Israeli companies Ocif and Aviv holding 25% of the capital each and IT International Theatres with a 50% stake.

Mall of Sofia was unveiled in May 2006 in downtown Sofia and has a built up area of 73,000 square metres. All 130 shops have been rented out to major global brands for EUR 30-60/sq m a month. The complex boasts Bulgaria’s first 3D cinema and 12 other cinema halls.

(Dnevnik)

The Bulgarian Stock Exchange is facing a bleak outlook for the rest of the year but analysts and investors are optimistic about its short- and the long-term future, showed a poll of Dnevnik daily.

Most of the polled said the Bulgarian and the global capital markets have not seen the worst of the crisis yet, and shares may be expected to recover no sooner than next year.

One in four people said the crisis is not over and new bank failures may be lying ahead. Only 22 percent said the worst is behind our backs.

The BSE is tied up to the world’s leading bourses and so may see further declines by the end of the year, experts said.

“Once the magic carpet of equity funding was pulled out from under investors’ feet, shares started floating in all directions and still find it hard to hit solid ground,” said Krasimir Atanasov, portfolio manager at Elana Fund Management.

Panic and lack of confidence among BSE investors caused massive withdrawals from mutual funds and closing of repo deals.

The real implications of the global financial cataclysms for the Bulgarian economy will be felt only next year. Atanasov said global stock indices may bounce back over the next three or six months but did not rule out further steep declines on the developed markets that would send new shudders down Bulgarian investors’ spines.

(Dnevnik)

Bulgaria’s dominant fixed-line carrier BTC pressed in a letter signed by CEO Bernard Moscheni for immediate decrease of fixed-to-mobile call rates by no less than 40%.

The letter was sent to more than 500 people including Bulgarian MPs, telecoms commissioner Viviane Reding and journalists.

Bulgaria’s telecoms watchdog CRC made a surprise decision last month to change the scheme for gradual reduction of fixed-to-mobile termination prices adopted in January.

The statement came out as the ultimatum expired that Moscheni gave cellular operators to cut prices and threatened to unilaterally change interconnection contracts. BTC backed the regulator’s decision dubbing it “the end of regulatory vacation” of mobile phone operators.

However, Mobiltel, Bulgaria’s biggest wireless carrier, accused the CRC of cartel with BTC and rose in favour of the January scheme.

Globul, the market’s other major cell phone operator, said the regulatory environment had been unpredictable in the recent months.

Under the new scheme, fixed-to-mobile charges will fall by over 60% in peak hours and by 66.9% in off-peak hours from July 1, 2008 till July 1, 2010. Call termination will be slashed by 49.6% in peak and 49.5% in off-peak hours. .

Mobile operators have cut wholesale call termination rates twice so far in the year slashing fixed-to-mobile prices by 16.1% for peak calls and 20.77% for off-peak calls.

(Dnevnik)

Bulgaria should fully protect savings in domestic banks to weather the worldwide financial storm and attract investments from the big European and global corporations, said Bulgaria’s foreign investment promotion agency chairman Chavdar Aleksandrov.

Aleksandrov labeled illogical the Government’s plan to extend deposit insurance to BGN 100,000 from 40,000 at present saying this left medium and big entrepreneurs unprotected and would drain Bulgarian capital from local banks.

The International Monetary Fund said in an early 2008 report that the wide current accounts gaps in Bulgaria, Serbia, Romania and the Baltic counties may cut off the flow of foreign investments.

“Now is the time for the Government to channel the budget surplus to the banking system. The 100% deposit guarantee would automatically step up cash flow from both Bulgarian and foreign businesses,” according to Aleksandrov.

“Bulgaria may not only avert the global financial crisis but even benefit from the current state of affairs,” said Aleksandrov adding that the association would urge for changes to the deposit insurance legislation.

(Dnevnik)