HSBC brands Greek short-term bonds cheap
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)