The Bulgarian software sector was the next to catch the global financial contagion with companies taking the axe on workforce, bonuses, business trips and Christmas holidays.

However, none of the market players owned up to the trouble and some managers were even optimistic.

The Bulgarian office of U.S. software giant Microsoft said they were quite busy and did not need to consider lay-offs.

The company is optimising costs by reducing business trips and replacing them by video conferences as well as using green technologies to cut power bills.

“In the face of a crisis we are shifting our focus. We see our role in helping customers optimise costs and spend less, and, on the other hand, increase revenues by improving customer service,” said Microsoft Bulgaria general manager Ognyan Kiryakov.

He said this is the right time to invest in IT while squeezing IT spending would be the gravest mistake.

Yet other manufacturers think recession is not the right time to buy software.

“Software is not a basic commodity. Installing big systems is a long process and companies do not dare go down this road at the moment,” commented Ognyan Trayanov, president of Bulgarian software company TechnoLogica.

Times are tough for Bulgaria’s exporters, which have already delayed projects, especially those selling on markets hit by the crisis, Trayanov said.

In the worst-case scenario, large-scale corporations will cross out Bulgarian investments and even dry out local divisions to rescue parent companies, according to Trayanov.

Public projects and EU funding will help Bulgarian software providers weather the crisis by playing the role of a reliable source of income.

TechnoLogica also plans to reconsider its investment plans despite sticking by a strategy to grow into Serbia, Macedonia, and Bosnia and Herzegovina.

The 100% foreign-owned companies with nothing but RnD centres in Bulgaria will be the first to fall victim to the global financial downturn, forecast Sirma Group executive director Tsvetan Aleksiev, adding that also under threat are pure outsourcing companies and start-ups.

The group, which comprises 14 companies, is faring well at the moment and does not need to streamline operations by cost and staff cuts.

(Dnevnik)

Chinese company Insigma Group and Italian Idreco have sealed a contract to build flue gas desulphurisation installation at units 5 and 6 of the country’s biggest coal-fired power plant, the state-owned Maritsa East 2, reported Chine Business Daily News.

The EUR 85.6 million project will be bankrolled by a EUR 34 million loan from the European Bank for Reconstruction and Development and a EUR 36.1 million aid under the EU’s Ispa pre-accession programme.

The selection may be challenged by the other bidders, Polish Rafako and the Italian division of French company Alstom Power.

Alstom told Maritsa East 2 in the summer it had launched legal proceedings against Insigma Group for planning to use in Bulgaria a technology it had been licenced to use exclusively in Singapore.

The court will rule on the dispute in the spring of 2009. If it decides in its favour, the French company is ready to follow up with the Bulgarian court.

The Italian-Chinese consortium was assigned the contract in a second procedure after the first failed due to the exorbitant price offered by Alstom, Austrian Energy & Environment and Rafako.

The construction of the FGD equipment is more than a year behind schedule and is unlikely to meet the 2010 deadline.

(Dnevnik)

State-controlled gas distributor Bulgargaz will step up supplies to the stricken Sofia heating utility after the municipality voted on granting its stake to the Government, the company said yesterday.

Squeezing out no more than 35% of the quantities it needs from Bulgargaz forced the utility to delay turning on heating and barely warm up radiators.

The Bulgarian Energy Holding, the newly-created structure bundling key power generation assets including Bulgargaz, will do what it takes to guarantee steady heating energy supply, the management said in a statement.

Toplofikatsia Sofia heats 400,000 homes in the Bulgarian capital and has no alternative at the moment, BEH said.

BEH will raise its capital to cover the utility’s debts to Bulgargaz, the structure said revealing neither sources nor figures.

Meantime, the Supreme Administrative Court made a final ruling to keep the new natural gas prices from October until it decided whether or not they violate the law.

SAC chairman Konstantin Penchev headed the five-member panel which ruled that the contested prices better be in force than be suspended from regulation until the magistrates have their say.

(Dnevnik)

Bulgaria’s pension insurers and asset managers called on the state to make specific commitments and mitigate the impact of the global financial crisis.

The Bulgarian Association of Supplementary Pension Security Companies proposed MPs and central bank governor Ivan Iskrov that the state extend a blanket guarantee on pension funds’ deposits with local lenders.

However, lawmakers did not throw their support behind the idea and only expanded the state protection to mandatory insurance fund deposits of up to BGN 100,000.

Pension insurers’ average deposit is much bigger, and universal and occupational schemes have nearly BGN 412 million in bank deposits.

The state guarantee leaves out deposits of voluntarily pension insurers, where many employees invest for a third pension and some save money.

The asset management companies urged for extending the BGN 100,000 protection to deposits of collective investment schemes and investment intermediaries.

The proposal has been sent to the ministers of economy and finance, the chairman of the financial supervision commission and the chairman of the economic policy parliamentary committee.

Pension insurers and asset management companies took up anew the idea of participating in large-scale infrastructure projects by listing new companies, issuing bonds or forming public-private partnerships.

(Dnevnik)

Bulgaria’s financial and operating leasing market grew 77.7% year-on-year to BGN 5.430 billion in third-quarter 2008 slowing from 83% in the previous three months, showed central bank data.

Companies from the sector explained the slowdown with seasonal factors.

New financial leasing contracts added up to BGN 1.077 billion against BGN 1.138 billion in the second quarter of the year, up 48.4% and 72.7% on the year, respectively.

The third quarter is traditionally weaker because of the summer holidays, UniCredit Leasing CEO Plamen Minev told Dnevnik ruling out the option that the ongoing financial turmoil may have also played a part.

However, he forecast the global economic trouble will reduce the growth in the fourth quarter, traditionally the strongest period.

The crisis might weigh on the leasing market in the fourth quarter of 2008 or the first quarter of 2009, according to the association’s co-chairman Teodor Marinov.

Car leasing came in at BGN 1.829 billion, retaining its biggest share of the total market with 34.2%.

Machines, facilities and industrial equipment generated 27.2% of the market, the second largest of all segments.

(Dnevnik)

The Bulgarian Stock Exchange registered yet another market capitalisation slump, to below BGN 12 billion, as the main indices closed 7% lower on Monday.

The blue-chip SOFIX finished the session at 361.41 points, its lowest in five years and two months, as buyers vanished into thin air plunging even the bluest by double-digit figures.

“No one can say whether we have finally hit the bottom,” commented Blagovest Krachev, broker at Karoll.

He said stocks have no bad news to respond to but are flinching from low liquidity and a cratered confidence in the capital market.

Still investors were spooked by news of a weakening U.S. consumption and the Japanese economy sliding into recession. The G20 meeting at which the architects of the global economic landscape searched for the exit from the mess also failed to lift markets.

Just as in previous falls, turnover on the BSE was mush brisker than the spells of recovery. Excluding the 2.7 million traded shares of fuel distributor Petrol, which generated BGN 24.5 million, stocks fetched just over BGN 3 million, relatively more than the average daily turnover of the recent weeks.

The market’s most liquid companies - Industrial Holding Bulgaria, industrial conglomerate Chimimport, road builders Holding and Trace Group and paint and varnish maker Orgachim emerged bruised and battered from Monday’s session.

Lead and zinc smelter OCK was the only Dnevnik 20 component to close higher.

(Dnevnik)