The Bulgarian Stock Exchange set a bleak world record on Tuesday when SOFIX of the blue-chip companies crashed 10.74%, the steepest among 90 markets tracked by Bloomberg.

Bulgaria’s oldest index retreated to levels of 63 months ago almost wiping off the gains of the oldest investors who have been bold enough not to dash for thee exit.

The other key index, the broader BG40, tumbled by a double digit to close the session below its 100 points base value where it started on February 1, 2005.

The global financial market mess has evaporated USD 30 trillion from capital markets around the globe, under Bloomberg estimates.

Analysts declined to make any forecasts at all but said the root causes of the recent events are psychological and do not reflect the real state of events because of the tight trading volumes.

“The current situation is a mirror image of what was happening last autumn. Back then many people though the rise was unjustified and now they say the fall is unjustified as well,” commented Razvigor Hristov, portfolio manager at asset management company KD investments.

No parallel can be drawn with January’s slump, when trade volumes were much bigger, Hristov added.

The gloomy mood pressed by over 22% the market capitalisation of blue-chip Bulgarian American Credit Bank.

First Investment Bank erased more than 15% from its value.

Sparky Eltos, the power tools maker, was down almost 19% pairing double-digit losses at construction materials distributor Toplivo, road builder Holding Patishta and Industrial Holding Bulgaria.

“Empty-handed speculators are making a last-ditch effort to sell out,” said Petko Valkov, executive director of BenchMark Asset Management.

The Bulgarian stock market gave one of the most lackluster performances throughout Europe in the past 12 months losing close to BGN 20 billion, or two thirds of its value, since early last October when it almost peaked at 2,000 points.

(Dnevnik)

Heating tariffs will increase from January 2009 and will be adjusted to October’s natural gas price hike, said the energy regulator’s chairman, Konstantin Shushulov.

The State Energy and Water Regulatory Commission did not reiterate its forecast of a10-12% price increase.

Gas prices jumped by 23.89% from October but state-controlled distributor Bulgargaz has said it would ask for a further 25.88% increase from January.

Holding back the legislative changes that will allow utilities to revise prices outside the regulatory period will heap up their losses, according to Shushulov.

Toplofikatsia Sofia will be BGN 40 million in the red this year, whereas losses at the Plovdiv and Veliko Tarnovo utilities will grow to BGN 5.8 million and over BGN 1 million, respectively, under data by SEWRC.

(Dnevnik)

Right-wing parliamentary opposition formation Democrats for Strong Bulgaria will put forward a set of measures aimed at mitigating the effect of the global economic downturn.

The party urges for a 2% cut in value-added tax, a 2 point lower social security contribution rate, a 5% tax cut for sole proprietors and bigger tax rebates.

The measures will cut businesses’ labour costs and protect jobs, according to DSB.

Employers, however, said the proposal would only have a marginal effect.

“This is mere political maneuvering. It is businesses and the financial sector that need a helping hand at the moment, whereas the tax rebate is stretching a point in favour of trade unions,” commented Evgenii Ivanov, executive director of the Confederation of Employers and Industrialists in Bulgaria.

No VAT cuts could be considered at the moment as the system is not sound enough, according to Ivanov.

The proposals are made out of inertia and would not have any positive impact, said budget parliamentary committee deputy chairman Aliosman Imamov of ruling coalition member DPS.

Both the state and consumers should tighten their belts to weather the crisis, according to Imamov.

Meantime, leftist party Coalition for Bulgaria said pensions should be increased from January 1, 2009 instead of April 1 as planned in the draft budget.

(Dnevnik)

The Italian division of French company Alstom Power has lodged an appeal with the Bulgarian anti-trust regulator against assigning Italian-Chinese consortium Idreco-Insigma Group 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.

The appeal is posted on the website of the Commission for Protection of Competition.

Alstom said the contract should not be signed until CPC has checked whether the procedure violates competition law.

The tie-up has got the green light of the European Bank for Reconstruction of Development but pen has not been put to paper yet, the TPP said declining to give any timeframes for the project.

The EUR 85.6 million project, which is already 14 months behind schedule, is funded by a EUR 34 million EBRD loan and a EUR 36.1 million aid under the EU’s Ispa pre-accession programme. The power plant will provide the rest.

Alstom has launched a legal wrangle against the Chinese company over the technology it plans to deploy at the Maritsa East 2 project. The Singapore court is due to make a ruling early next year.

(Dnevnik)

Bulgarian American Credit Bank has dismissed Stoyan Dinchiiski from the positions of executive director and board member, and Frank Bower resigned as executive director but stayed in the operating management, the lender said in a filing to the Bulgarian Stock Exchange, where it is listed.

The bank is always represented by executive directors Dimiter Voutchev and Maria Sheitanova together.

No further details were immediately available.

BACB’s two biggest shareholders – Allied Irish Bank and U.S. Grammercy Emerging Market Fund, agreed recently to admit to the supervisory board Gerald Byrne, John Power and Evgeni Ivanov, the latter proposed by the U.S. company.

In February the Irish bank acquired 49.99% in BACB from then majority owner Bulgarian American Investment Fund. The 6.31 million shares had a price tag of EUR 219 million.

(Dnevnik)

The combined losses of the global capital markets triggered by the worldwide turmoil spiraled off to USD 30 trillion, shares and bonds included, Bloomberg reported.

Banks and financial institutions wrote off a further USD 996 billion from various loans, the agency said.

Last weekend’s G20 summit in Washington failed to stem the negative mood on markets, which stormed down to new lows in the week.

Analysts do not dare say at the moment how long the free fall will take. Inactive institutional investors and the grave situation on the international capital markets make it impossible to pinpoint the bottom.

Although it all started from the U.S., it is emerging economies that had their stock markets hurt most severely.

The NYSE, which is the world’s biggest regulated market, plummeted 47.56%, the sharpest since the Great Depression.

Russia, India ad China also failed to avert heavy selling. Investors are turning their backs to shares and bonds to seek refuge in commodity markets.

The Bulgarian stock market is also battling heavy implications from the global financial downturn.

(Dnevnik)