Bulgaria’s key stock market index took analysts unawares diving below the 300 points mark in Tuesday trading.

SOFIX, which tracks the 20 blue chips, dropped a new 2.5% to 290.57 points setting the tone for other stocks as well.

Dnevnik 20 of the biggest and most liquid companies was off 0.6% to 43.19 points; BGTR30 slipped to 217.34 points.

In a failed attempt to defy the negative trend, BGREIT of the property funds was knocked down 0.77% closing the session at 43.89 points.

Indices were up in low early trading but the gloom gathered as volumes increased.

The SOFIX dive dragged many benchmark stocks to historic lows, with industrial conglomerate Chimimport trading 4% lower at less than BGN 1.50.

Another of the bluest blue chips, Eurohold Bulgaria, lost as much to fall below face value to BGN 0.98 per share.

News of a successful capital hike failed to lift the gloom over insurer Euroins, which was down 3% to less than BGN 2.

(Dnevnik)

Sofia-based firm Bromac has sealed a preliminary accord to sell a 30% share in Corporate Commercial Bank to an Omani fund, the bank said in a filing to the Bulgarian Stock Exchange.

The buyer, Luxembourg-registered Bulgarian Acquisition Company II, is one of the sovereign wealth funds of the Sultan of Oman.

The fund has implemented a flurry of investments in Bulgaria and believes buying into Corpbank is a major step in its expansion in the country.

The Oman State General Reserve Fund, formed in 1980, ran assets of USD 8.2 billion in 2008, under data of the Omani Finance Ministry.

Bromac has a 57.78% stake in Corpbank. The lender’s other big shareholder is Bulgarian Institute of Microelectronics, which controls 23.32%.

Corpbank has a capital of BGN 60 million, split into six million shares with face value of BGN 10 each.

(Dnevnik)

Lenders are already absorbing half of the first BGN 190 million credit line from the Bulgarian Development Bank, said Dimitar Dimitrov, executive director of the state-run institution.

Last year the government added BGN 500 million to the capital of BBD, which was set up to give lines of credits to commercial banks to lend on to small and medium-sized companies.

By April the money will flow into all partner banks. Eleven lenders have so far signed agreements with BDB, and talks are in progress with five more.

Part of the resources will be channeled to state guarantees on the loans, the bulk of which planned for long-term and medium-term investment projects.

The resource will also support projects under the EU’s structural funds requiring advance payment.

The loans will bear a fixed interest rate of 5% plus up to 3 points, with banks applying their standard risk assessment criteria.

(Dnevnik)

Local company Litos-iBuild has halted for one year work on the first shopping mall in the southern town of Pazardjik, said mayor Todor Popov.

The mall, whose construction began in June 2008, was scheduled to welcome first shoppers by this autumn.

However, digging work has not started yet. The investor has only removed the road surfacing material from a municipal parking lot where the shopping centre should stand.

Company owner Ivo Kolushev blamed the change of plans on the global financial meltdown.

The EUR 6.5 million project, which is financially-packaged by local Investbank, is expected to spread on a 1,661 sq m site in the western part of the town. Its four floors will accommodate 120 retail outlets.

(Dnevnik)

Bulgarian bathroom fixtures manufacturer Ideal Standard Vidima is screening its worfkroce as it seeks to slash 150 jobs by the end of the month, said executive director Krasimir Kolchev.

The job cuts will hit all departments of the Sevlievo-based plant, with work quality, discipline and education among the selection criteria.

The firm said this was a very tough task to fulfil but pointed out it was responsible not only to staff but also to its business, which has to be adjusted to a deep cut in demand caused by the global economic crisis.

In the meantime, Korado Bulgaria, the local unit of the Czech producer of flat and decorative radiators, announced 85 job cuts as it moved painting and packaging operations to the Czech Republic.

Korado’s majority owner plans to retool the facility’s painting and packaging units and might hire back the workers after project completion, said commercial director Petar Petrov.

As clouds over the world’s finance and economy thickened, workload at Korado fell by 15-20% in January compared to the same month of 2007, Petrov said, adding that exports slumped to 70% from 90% in previous years, he added.

(Dnevnik)

The Bulgarian banking sector will trim workforce by 8 to 10% in the near term, experts told Dnevnik.

Some 1,000-1,500 bank employees have had to go on the dole since the end of last year.

The sector gives job to around 25,000 people, but the central bank’s latest statistics are yet to come out.

Worst hit by the lay-offs will be credit centres, which sift through loan applications, and branch credit departments. Some banks move staff around, while others change payment schemes.

Experts commented banks were responding to the new economic environment and to the sharp slowdown from a burgeoning growth only five months ago.

New market conditions have left lenders scratching their heads about planned office openings in the face of a global financial downturn, a shrinking credit market and wary investors.

As the global economic crisis is filtering into the Bulgarian economy, experts predict the credit market will continue to shrink during the year and prompt massive job losses at banks scrambling to optimise operations.

The silver lining is that lenders will now be able to get back to projects they put on the backburner as they fought for market shares.

As compettion in the sector heated up and the credit market zoomed, banking staff demand and turnover sped up to unprecedented levels. Banks even stole staff from each other as middle managers were often followed by their team to the new job.

Under data of the Bulgarian National Bank, the local banking sector employed 30,571 at the end of 2007, up 14.33% on the previous year.

(Dnevnik)