Fitch Ratings lowered Bulgaria’s sovereign rating against the backdrop of a faltering economy less than two weeks after the country was downgraded by Standard & Poor’s.

The agency also decreased the ratings of Hungary, Romania and Kazakhstan.

Following the rating action on Bulgaria, Fitch slashed the ratings of five local lenders as they cannot exceed the country’s.

The list includes UniCredit Bulbank, Societe Generale Expressbank, EIBank, Allianz Bank Bulgaria and Eurobank EFG.

Bulgaria’s sovereign rating was cut one notch to ‘BBB-‘, the lowest on the investment-grade scale. The outlook is stable.

"The downgrade reflects the increasing risk of a recession in response to a marked decline in external financing flows, which will necessitate a sharp contraction in domestic demand to rein in the current account deficit," Fitch said in a statement.

However, the budget surplus and the currency board mechanism pegging the lev to the euro will keep Bulgaria afloat even if the economy registers two successive quarters of negative growth, the agency said.

Fitch downgraded to ‘BBB+’ from ‘A-‘ the long-term foreign Issuer Default Rating (IDR) of Societe Generale Expressbank, Eurobank EFG, EIBank and Allianz Bank Bulgaria.

UniCredit Bulbank's support rating was lowered to '2' from '1'.

Moody’s is the only agency that has not revised its sovereign rating on Bulgaria from ‘Baa3’ with a stable outlook but has warned of a possible downgrade.

Standard & Poor’s has rated Bulgaria ‘BBB’ with a negative outlook.

(Dnevnik)

Bulgaria’s new home mortgages dropped almost in half over the third quarter from the previous period, central bank statistics showed.

Local lenders gave 6,406 new loans worth BGN 620 million from July to September compared to 12,165 worth BGN 761.7 million for the three months before.

Banks have put lending plans on the back burner and are cutting down in all segments amid brisk consumer demand and growing appetite for cash, bankers say.

Alpha Bank’s one-year fixed-rate home mortgage for purchase, construction or finishing works was the most popular product on fincity, a portal for financial services and information..

The other most searched loans are available from DSK Bank and Raiffeisenbank.

UniCredit Bulbank’s Quick Consumer Loan was the biggest in euro-denominated consumer loans.

The average mortgage rose to BGN 53,796 in the third quarter from BGN 51,692 in the three months before, under central bank data.

Banks’ combined home loan portfolio added up to BGN 7.4 billion, up 9.1% on the quarter against nearly 12% in the previous, and 49.5% year-on-year.

(Dnevnik)

The Bulgarian Stock Exchange made another futile attempt at bucking the negative trend as shares rose between 1 and 3% in early trading only to lose what they had won towards the closing bell.

The blue-chip SOFIX headed south as Dnevnik 20 tracking the 20 most liquid companies closed up 2.37%.

It was another day of sluggish turnover of BGN 1.36 million.

“Mutual funds are still buying back stakes and some investors are biding their time until prices get better”, commented Boncho Ivanov, portfolio manager at UBB Asset Management.

Among Monday’s gainers were Doverie Obedinen Holding, insurer Bulstrad and power tools maker Sparky Eltos.

BGREIT of the property funds slid 0.69% to 53.08 points as nearly a third of the polled on pazari.dnevnik.bg said prices will fall by 10-30% next year and as many braced up for a 30-50% crush.

Analysts say shares will stick to their current levels by the end of the week but may sink deeper if foreign stock markets shudder again.

(Dnevnik)

Almost all of Bulgaria’s major insurers will raise the price of the mandatory motor third-party liability cover by the year’s end after the latest hike in August-October.

Euroins will increase the price of the policy for Sofia-registered vehicles with engines of up to 1,800 cu cm to BGN 176.40 from BGN 137.40 at present as of November 15, said executive director Anton Pironski.

Tariffs at market leader Bulstrad will gain some 6% but head Rumen Yanchev declined to give any timeframe. The price hike is prompted by growing car accident claims and the rising cost of auto repairs, he said.

Lev Ins executive director Stefan Sofianski said fierce competition only allows insurers to raise tariffs when they really need to. The company revised its prices upwards about a month ago.

Armeec auto insurance head Ivan Mladenov said the company was planning a major price hike.

Victoria will put up tariffs by up to 30% no later than December 1, said executive director Dancho Danchev.

Bul Ins will adjust prices in early 2009, said Bul Ins executive director Petrozar Petkov.

(Dnevnik)

The Bulgarian energy ministry said in a letter to Sofia municipality the state was ready to be granted the 58% municipal interest in the city’s ailing heating utility.

The proposal came after the state blocked the municipality’s idea to pump BGN 55 million into the capital of Toplofikatsia Sofia.

Meantime, head Petko Milevski told BTA state news agency the utility would only switch on the heating in kindergartens, schools and hospitals due to scanty supply from state-run gas distributor Bulgargaz.

Homes and other public buildings will stay in the cold despite Toplofikatsia’s pledges to heat all of its some 400,000 subscribers.

The utility is still working on summer mode and the gas it gets is only enough to heat up water, said Milevski.

Bulgargaz has cropped supplies to Toplofikatsia to 30% of the needed quantities over ballooning outstanding debts.

The gas company’s management was not immediately available for comment.

The sold-off Varna and Burgas utilities said they would switch on the heating with the first offering a 5% discount for buildings where 80 percent of the homes are hooked to the grid.

(Dnevnik)

Russian company Atomstroyexport, which was picked to build Bulgaria’s nuclear power plant in the Danube town of Belene, said it has signed an annex with national power utility NEK to supply the corpus, steam generator and the turbine for the plant’s first block.

The Bulgarian party was tight-lipped on the matter.

Last week the Government voted on granting BGN 300 million to the newly-founded Bulgarian Energy Holding to buy equipment for the plant.

The Belene NPP project is unfavourable for Bulgaria and is a Trojan horse of Russian interests in Europe, commented Georgi Kaschiev of the Vienna risk research institute, who took part in the second workshop on the nuclear project gathering NGOs, mayors and MPs.

The project is opportunistic with Bulgaria expected to have more energy than it needs in 2015 over heavy TPP output, Kaschiev said.

The project’s price tag will more than double from the initial EUR 4 billion on soaring materials and engineering services prices, Kaschiev forecast.

Neither will the investor keep up promises of creating many local jobs having already hired 2,500 Russian engineers, technicians, welders and other workers, according to the expert.

(Dnevnik)