The combined market cap of the shares traded on the Bulgarian stock exchange has retreated to mid-2006 levels, down a massive 10 bln levs since October 2007.

The market cap of the nation's public corporations fell to 19.9 bln levs on Monday to account for around 30% of GDP, down from 56% of GDP in late 2007.

The nine months of bear market are taking their toll on the blue-chip index SOFIX which tracks the 19 biggest companies on the bourse.

The index hovered around the 1,000-point mark on Monday, dipping briefly below that psychological level.

The index has lost over 40% of its value so far in 2008.

News agency Bloomberg has reported that the Bulgarian stock market is among the top 3 worst performers in Europe this year.

Analysts are reluctant to point to a psychological threshold the would trigger a turn-around.

Boris Bonkin, a portfolio manager at pension company Allianz Bulgaria, said the withdrawals made by mutual fund investors are further undermining the market which in turn leads to lower mutual fund yields that prompt further withdrawals.

The local mutual fund market contracted by 8% in July with net assets falling to just below 800 mln levs, shows data of the asset managers.

The decline in mutual fund asset value is 28% for the first half of 2008. The market stood at 1.15 bln levs at the end of 2007.

The speculators have bailed on the market, leaving it to the long-term investors but the problem now is the low liquidity of the bourse, said Bonkin.

Stoyan Nikolov, a broker at First Investment Brokerage House, pointed to the increased bourse turnover as one indication that a reversal of the negative trend could be around the corner. He noted other potential turn-around signals as solid financial reports and the stabilisation of the commodities and FX markets.

Foreign investors could come to the rescue of the stock market as they would increase liquidity and buying momentum, said Bonkin. However, the recent EU sanctions have dissuaded foreign buyers as they signaled a loss of confidence at the highest level.(Dnevnik)

Icon Bulgaria, the local unit of Greek construction group Gek Terna, will invest 100 mln euro in an office building in the center of Sofia, said real estate news portal propertyxpress.com.

The construction plans were confirmed by Icon Bulgaria which declined to give further details ahead of the project's official unveiling in October.

The office building, facing the Macedonia square, will comprise two towers of around 19 floors each, judging by the architectural rendition posted on the sgrada.com website.

According to the website, the Icon building will be called Macedonia Tower and will have a footprint of 3,450 sq m. It will offer 31,844 sq m of office space, 4,407 sq m of retail space and parking for 391 cars.

Icon Bulgaria plans to start construction by the end of 2008 and complete the build by 2011.

The company has estimated annual rent income at 8.5 mln euro, said sgrada.com.

The Icon portfolio features also a mixed-use office, residential and retail scheme on the Bulgaria boulevard in Sofia and a luxury residential compound in the capital's Boyana district.

In 2007, Icon Bulgaria started the construction of a sports and entertainment complex in Samokov.

The 72 mln euro complex will feature spa hotel, shopping center, small golf course, amusement park, swimming pool and tennis courts.

The company plans to complete by 2010 an upscale vacation village in Borovets and a logistics center near the village of Krivina.

(Dnevnik)

Cinema City International (CCI), part of Israel's International Theaters, will pay 18 mln euro to increase its participation in two mall developers in Bulgaria, reports news agency SeeNews.

Under the terms of the agreements, CCI will buy 15% in Mall Plovdiv, the company building a large shopping center in Plovdiv.

The Plovdiv mall will have 25,000 sq m of lettable retail space and should be completed in early 2009.

CCI will also acquire 45% of Malls Cinema City which is building a shopping center in Ruse, on the Danube.

The deal will increase to 90% CCI's participation in Malls Cinema City.

The Ruse mall will have 35,000 sq m of lettable retail space when it opens in 2009.

CCI is also developing a shopping center scheme in Stara Zagora. In partnership with Israel's Aviv Group, CCI will invest 70 mln euro in the project.(Dnevnik)

The plant that Montupet, the French manufacturer of aluminum components for the automotive industry, is building in the Bulgarian city of Ruse, on the Danube, will start operation on September 12, said Ivelin Dimitrov, head of human resources at Montupet Bulgaria.

Dimitrov said the construction activity on the production site is winding up.

The 70 mln lev plant has been connected to the water, electric and gas grids of the Ruse industrial zone where it is located.

Aluminum auto components will make up 62% of the plant output.

The French investor has said the plant is designed for an initial annual turnover of 45 mln euro which will later reach 140 mln euro.

The Ruse plant will supply auto parts for car manufacturers Renault, Peugeot, Citroen, Audi and Ford.(Dnevnik)

A total of 11 cable operators based throughout South-eastern Bulgaria said they will no longer carry local channel bTV over the licensing fee of 2.32 levs per subscriber demanded from the News Corp.-owned broadcaster.

The bTV demands are old news, said Magdalena Georgieva, executive director of the local association of cable operators. The company made similar demands a year ago but the association rejected them. BTV is using the expiry and necessary renewal of the transmission agreements to have another go, said Georgieva, adding that, in her view, the demands were groundless.

She further said that each of the affected cable operators will have to decide on its own whether or not to accept bTV's terms.

There is no regulation binding the cable operators to carry bTV, said Georgieva. They are only obliged to transmit the state-owned BNT.

The association sent a letter to bTV on Monday, requesting the scheduling of a meeting to discuss the issue.

BTV said it has not received any letters from the cable operators. The broadcaster said it had been invited to meet with the association on August 7 and has accepted.

The TV channel confirmed it had proposed a new broadcasting tariff to the cable operators due to take effect September 1.

Nova TV, the nation's other big private broadcaster, has so far not tried to collect a licensing fee from the cable operators.

Bulgaria's telecom regulator has over 500 cable operators on record.

Unofficial data puts their combined viewership at around 1.7 mln. The average monthly subscription fee is 15 levs.(Dnevnik)

The deadline for the adoption of the list that will be used by the National Health Insurance, the health ministry and the hospitals to pay for drug supplies has been extended to January 30.

The list was scheduled to take effect on April 13, 2008 but the government only put together the commission that will draw it up some ten days ago.

Drug manufacturers said they suspect a further extension may have to be granted.

No conspiracy theory here, just administrative inadequacy, said Rosen Kazakov, executive director of the association of pharmaceutical manufacturers.

He added that some 60 new generic and cheaper drugs are now unlikely to make the list to the detriment of patients.

Deyan Denev, executive director of the Association of Research-based Pharmaceutical Manufacturers in Bulgaria, the delay cold cause major problems if the NHIF decides to negotiate drug supplies for 2009.

In the interim between the expiry of the old and the adoption of the new list, the current rules will be abolished and the new rules would not have taken effect and having the negotiations in an environment of complete arbitrariness would be dangerous, said Denev.

The drug manufacturers are also unhappy with the refusal of the heath ministry to register new prices for some 200 generics.

The companies are allowed by law to adjust their pricelists for inflation on semiannual basis but the health ministry argues they had already done this with the automatic reregistration of the drugs in January 2008.(Dnevnik)

The money that debt-ridden steel maker Kremikovtzi owes to the Bulgarian government may top 900 mln levs, elevating the state to the top of the creditors' list, economy minister Petar Dimitrov said on Monday.

The steel maker owes some 200 mln levs in unpaid bills to gas distributor Bulgargaz, state railway operator BDZ and electric utility NEK, said Dimitrov.

In addition, the government may be in position to make a 400 mln lev claim against the plant. The amount was made available to the company prior to its privatisation. The management's subsequent failure to execute a viability program renders the lifeline inadmissible under EU rules.

The amount now stands at around 700 mln levs with interest, said Dimitrov.

With claims of around 900 mln levs in total, the government will also have a leading role in the selection of a new owner for the struggling steel maker, said the government official.

The total liabilities of the company are estimated at around 2.5 bln levs.

The economy ministry has reiterated that a court ruling on an insolvency case against Kremikovtzi should be handed down within a week. That will be followed by the appointment of interim receivers and the drawing up of the list of creditors.

The meeting of the creditors will likely take place in September or early October, said Dimitrov.

'The government is undoubtedly the main creditor,' said the economy minister. 'To my surprise both the management and the receivers are exerting indirect pressure on the government to take sides.'

After Indian steel maker Arcelor Mittal confirmed last week its interest in Kremikovtzi, the bonds secured with assets of the plant ticked up on Monday.(Dnevnik)

Increased market competition has reshuffled the nation's top 10 banks in terms of household deposit portfolio, shows end-June data of the Bulgarian National Bank.

Raiffeisenbank (Bulgaria) EAD was the biggest gainer in H1 with 376.6 mln levs in new household deposits, a 30.4% year-on-year increase that lifts the bank to the no.5 spot in terms of total deposits.

First Investment Bank and SG Expressbank dropped a spot in terms of new deposits.

Raiffeisenbank is followed by DSK Bank with 298.7 mln levs in new deposits in H1, Postbank with 259 mln, UBB with 206 mln and Bulbank with 193 mln levs.

In terms of total deposits, DSK Bank is tops with 4.043 bln levs at end-June.

It is followed by UniCredit Bulbank with 2.961 bln, Postbank with 2.383 bln, UBB with 2.175 bln levs and Raiffeisenbank with 1.615 bln levs.

Two banks in the top 10, First Investment Bank and Economic and Investment Bank, posted a decline in deposited funds, down 5.7% and 7%, respectively.(Dnevnik)

The assets of Bulgaria's voluntary pension funds continue to decline by the end of June, falling 8% in H1 to 622.82 mln levs, shows data released by the nation's financial regulator.

Despite the negative outcome, the voluntary schemes added over 12,000 new accounts in H1 and now manage the pension plans of 600,000 Bulgarians.

Allianz Bulgaria is the breakout leader on the segment with a 44% share, followed by Doverie with 27%. In terms of asset value, Allianz Bulgaria has a market share in excess of 50%.

Equities account for close to 35% of the investments made by voluntary funds while government securities issued by EU members make up another 19%.

The average balance on voluntary pension accounts is down 10% to 1,030 levs.

The total assets of the nation's pension funds rose 3% to 2.4 bln levs in H1.

The upside was mainly due to the universal pension funds which posted an assets decline only in January.

The assets of the occupational funds are down close to 3% so far in 2008.(Dnevnik)