Bulgaria’s industrial production perked up in September but retail figures revealed that only food, cigarette and beverage purchases are swinging up.

The data matched the trend indicated in the latest Reuters poll on business climate in Central and Eastern Europe, where the index moved up to 10 in October from -7 in July. Bulgaria ranked among the four countries with an upbeat outlook of 7 from -5, but business climate is worse than the region’s average.

Bulgaria’s industrial index eked out a 2.7% increase on a monthly basis in September, with the growth spearheaded by chemical products.

On the flip side, the index tumbled by more than 19% for the twelve months, with the mining and quarrying, and the processing industry bearing the brunt. Investment products also took a steep slide.

Retail sales of food, cigarettes and drinks maintained a small, steady increase of 2.5% year-on-year in September. Purchases of cars, computers and home appliances saw the most drastic slump.

Speaking to Dnevnik, analysts said the latest industrial output numbers published by the National Statistical Institute (NSI) were a positive sign that the Bulgarian economy is coming out of the woods but pointed that one positive month does not eliminate the risk of a new decline.

Bulgaria is pinning its hopes to help it get out of the ditch mostly on the EU, where experts say the benchmark business indicators are fuelling optimism that certain sectors are seeing a turnaround.

(Dnevnik)

The Bulgarian government will float between 10 and 15% of the capital of Bulgarian Energy Holding (BEG) and four of its subsidiaries for trade on the local stock market, energy minister Traycho Traykov said.

The subsidiaries headed for the Bulgarian Stock Exchange (BSE) include national grid operator NEK, gas company Bulgargaz, transmission system unit Bulgartransgaz and telecoms operator Bulgartel.

The sell-off of some of the state-owned energy companies is at the forefront of a new restructuring strategy initiated by the new Cabinet. The listing could drag on for months so preparation should commence before the end of the year, Traykov announced.

At a meeting with business representatives hosted by Capital weekly last week, Traykov unveiled plans for shake-up at NEK, involving spinning off electricity system operator ESO.

Also on the ministry’s to-do list is completing the large-scale energy projects in line with a new roadmap. A working group is being put together to negotiate gas supplies via the South Stream pipeline which will cross Bulgaria to carry Russian gas to Italy and Austria. The ministry will seek an increase to 61 billion cubic metres from 31 billion cu m a year.

When he came in office in the summer, Traykov pledged to stage the sell-off of Bulgaria’s tobacco behemoth Bulgartabac Holding by the end of the year but yesterday said plans will be postponed at least until the first quarter of 2020 as the method has not been picked yet.

(Dnevnik)

Bulgarian power distributors should share the burden of grid upgrades to plug in new renewable energy capacity with all electricity consumers, said Gogo Cheshmirov, regulation management head at EVN Bulgaria, the local unit of Austrian utility EVN.

The current regional distribution mechanism fails to ensure even distribution of the cost to overhaul power grid infrastructure, which is imposed on consumers, he added.

On July 1, the State Energy and Water Regulatory Commission (SEWRC), Bulgaria’s energy watchdog, introduced a green surcharge to industrial power tariffs for the deregulated market.

“The power distributors and the national grid operator NEK have showed a careless attitude to their grid development commitments,” said SEWRC member Plamen Denchev.

“The grid is clogged up and NEK has halted grid-connection in northeastern Bulgaria,” he noted.

He suggested that a new mechanism should be designed to set grid-connection tariffs based on proposed capacity and the burden should be split between investors and energy companies.

A total of 1,700 MW of clean energy projects are in the pipeline in southeastern Bulgaria, which is serviced by EVN. The bulk of them are hydro, followed by wind and solar.

(Dnevnik)

The Bulgarian Stock Exchange (BSE) opened up to the bullish mood fuelling rallies on the worldwide markets as indices pointed higher for a third week in a row.

The property index BGREIT was the only downer on Tuesday, when all indices jumped.

Indices danced to the tune on the US markets, where the Dow scored a new record-shattering high for the year, giving a bounce to markets around the globe.

In Bulgaria, the benchmark SOFIX of the blue chips and Dnevnik 20 of the biggest and most liquid stocks tiptoed up 0.62% and 1.39%, respectively. Trading volumes started to swell, reaching BGN 2.87 million, where two-thirds came from cigarette factory Slantse Stara Zagora. More than 272,000 shares changed hands, making up 23% of the firm’s capital.

“The market is moving up but investors are still holding their horses,” said Nikolay Kichukov, broker at investment brokerage Elana Trading. He said investors are still snubbing Bulgarian stocks.

Analysts say optimism will hold until the end of the week but trade is unlikely to see any major pick-up, according to Kichukov.

Meanwhile, investment banking titan Morgan Stanley yesterday predicted global developing markets will shoot up by 25% by the end of next year as profits are bouncing back and investors on developed markets are accumulating resources. If the forecast comes true, this will be the strongest rally since 1989.

(Dnevnik)

Bulgaria’s energy watchdog should fix solar feed-in tariffs for a 25-year period, said Roumen Hristov, board member of the newly-founded Bulgarian Photovoltaic Association (BPE).

Speaking at a PV energy conference hosted by Dnevnik on Tuesday, Hristov said the move would guarantee stability and lower the risk for banks to make a much-needed shot in the arm of the nation’s fledgling sector wrestling with funding as scarce as hen’s teeth.

The State Energy and Water Regulatory Commission (SEWRC) currently can put tariffs up and down by 5% each year.

SEWRC member Plamen Denchev explained the rules will be updated in the Renewable Energy Act to ensure stability and predictability for both banks and clean energy investors.

Maya Aleksandrova of UniCredit Bulbank warned that even if the tariffs are fixed, they would be below the market level.

The BPE also urged for differentiated rates for solar electricity generated from rooftop and ground installations.

Façade-mounted systems should qualify for the lowest prices as they have the least efficient, according to Hristov, who is manager of local PV provider Sun Service.

The association also proposed lifting to 100 kW the threshold for differentiated feed-in tariffs.

Solar-generated electricity rates could be on par with household power rates by 2015-2016, predicted Nikolay Berov, executive director of solar energy company Solarpro.

(Dnevnik)

Agriculture scooped up the lion’s share of the increase in loans given by Bulgarian banks in the third quarter of 2009, showed central bank figures.

The runner-up in terms of lending growth was the hotel industry, with trade snapping at its heels.

The farming sector saw an increase to the tune of BGN 93.7 million, with the hotel industry and trade posting BGN 77 million and BGN 71 million, respectively.

The reshuffle comes after two quarters when construction, the hotel sector, professional activities and scientific research dominated the rise in banking loans.

Loans made to the processing industry staged a second month of decline after picking up between January and March.

Expectations that after the burst of the property bubble investment will be channeled to the industry did not materialise even though the mining and quarrying sector saw lending surge by roughly BGN 14 million.

The combined business loan portfolio of Bulgarian banks added up to BGN 30.818 billion at the end of September, with the average at BGN 237,000. The volume swelled by 1.1% from the previous quarter and 3.4% on an annual basis.

Euro-denominated loans again sliced off a larger share, reaching 72 percent of the total portfolio.

The finger of blame for the anemic growth in lending is put on soft demand, UniCredit Bulbank said earlier this week at the presentation of the group’s quarterly report on the banking sector in Central and Eastern Europe. UniCredit Group does not expect immediate rebound of lending against the backdrop of forecasts that the economy will be slow on the road to recovery to growth rates close to the potential rates.

(Dnevnik)