HSBC brands Greek short-term bonds cheap

Kathimerini English - - Business & Finance -

Greek gov­ern­ment bonds ma­tur­ing through 2014 are “ex­tremely cheap” be­cause there is lit­tle chance the nation will force a re­or­ga­ni­za­tion of its debt on in­vestors in the next year, HSBC Hold­ings Plc said yes­ter­day. “Our cen­tral sce­nario is that Greece will avoid an in­vol­un­tary re­struc­tur­ing of its debt be­fore June 2013,” Steven Ma­jor, global head of fixed-in­come re­search in Lon­don, wrote in a client re­port. “Mar­ket val­u­a­tions ap­pear out of sync with po­lit­i­cal and eco­nomic re­al­i­ties.” Greece’s two-year bor­row­ing costs have surged al­most 1,000 ba­sis points since the start of April on mount­ing concern the coun­try will re­struc­ture its debt. There may be a greater chance of a “vol­un­tary ac­tion” to ex­tend the ma­tu­rity of Greek debt, Ma­jor wrote. “Such a sce­nario would not rep­re­sent a credit event, if man­aged well,” he said. “There has been a sig­nif­i­cant de­cou­pling be­tween the cash bonds and credit de­fault swaps, prob­a­bly a func­tion of the fear that the CDS will not be trig­gered.” UBS AG said Greek bor­row­ing costs will likely re­main “very volatile.” The Swiss bank “doubts” Greece will un­dergo a forced debt re­struc­tur­ing prior to 2013. “A sec­ond aid plan might be chal­leng­ing to jus­tify on a po­lit­i­cal level, since in a sense it proves Greece’s in­sol­vency,” Lon­don-based in­ter­est rate strate­gists Justin Knight and Andrew Rowan wrote in an emailed re­search note. “How­ever, the con­se­quences of co­er­cive debt re­struc­tur­ing – known and un­known – are ex­treme and un­pre­dictable.” (Bloomberg) what is pro­pel­ling us for­ward,” Anavlavis said in a tele­phone in­ter­view yes­ter­day. The com­pany’s per­for­mance was helped by “bullish” sales in Brazil, China and In­dia, he said. S&B man­u­fac­tures and trades in­dus­trial min­er­als and ores for the steel, met­al­lurgy and con­struc­tion mar­kets, in­clud­ing baux­ite, per­lite and ben­tonite. Met­al­lurgy is the process of sep­a­rat­ing met­als from their ores and pre­par­ing them for in­dus­trial use. Baux­ite pro­duc­tion re­turned to “re­cov­ery mode,” af­ter re­solv­ing per­mit is­sues in Greece, Anavlavis said. Baux­ite rev­enue rose 4.7 per­cent to 7.3 mil­lion eu­ros in the quar­ter.

(Bloomberg) cut pay­roll costs and “fight” to se­cure growth op­por­tu­ni­ties, Ioan­nis Spanoudakis, the firm’s chief ex­ec­u­tive of­fi­cer, said. “We are not look­ing to con­tain what we have,” Spanoudakis said in a tele­phone in­ter­view from his Athens of­fice this week. “We are not look­ing just to be­come a more cost-ef­fec­tive, pro­duc­tive com­pany but we are look­ing to be in­volved in more busi­ness op­por­tu­ni­ties in Greece, on the in­ter­net and out­side of Greece. There are no job cuts” in the pay­roll-costs re­duc­tion plan, which at present are the equiv­a­lent of about 1 per­cent of rev­enue, Spanoudakis said. No ex­act fig­ures are avail­able be­cause the plan, which has been agreed with the em­ployee union, is await­ing fi­nal ap­proval by the com­pany’s board. Greece’s gov­ern­ment is work­ing on leg­is­la­tion to reg­u­late the gam­bling mar­ket. Li­censes for video lot­tery ter­mi­nals, In­ter­net bet­ting and any in­stant-lot­tery scratch game are “tremen­dous op­por­tu­ni­ties” for OPAP and “we are go­ing to fight for them,” Spanoudakis said. Last month the Greek state an­nounced plans to sell its 34 per­cent stake in OPAP in 2012, call a ten­der for the na­tional lot­tery and sell its hold­ings in casi­nos as part of a state-as­set sale which aims to raise 50 bil­lion eu­ros through 2015 to help pay down the coun­try’s debt. (Bloomberg)

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