Greek yields hit new year-highs

Kathimerini English - - Front Page -

LON­DON (Reuters) – Greece’s gov­ern­ment bond yields hit their high­est this year yes­ter­day with the coun­try seen as the most vul­ner­a­ble in the eu­ro­zone to a spillover from an emerg­ing mar­ket sell-off. The sell­off hit junk-rated Greek and Por­tuguese bonds more than their eu­ro­zone peers. At a sale of 10-year bonds last year, only 14 per­cent of the bonds were sold to Por­tuguese in­vestors, debt agency data show. UK and US buy­ers took larger chunks. At Spain’s 10-year bond sale last week, 39 per­cent went to do­mes­tic in­vestors, ac­cord­ing to a pri­mary dealer. Data on Greece was not im­me­di­ately avail­able, but traders say many of the bonds are in the hands of for­eign hedge funds, many of them based in the United States. Bailed­out Greece and Por­tu­gal have also lured in­vestors with man­dates to in­vest in emerg­ing mar­kets as their yields are close to those in sim­i­larly-rated de­vel­op­ing economies. As the duo have dropped out of the main eu­ro­zone bond in­dexes due to their low rat­ings, they count on a sig­nif­i­cantly dif­fer­ent in­vestor base than do other eu­ro­zone states. “Italy and Spain have strong in­ter­nal de­mand, while Por­tu­gal and Greece rely on in­vestor de­mand from abroad and a lot of it has come from emerg­ing mar­ket fund man­agers re­cently ... as they found the yield at­trac­tive,” ING rate strate­gist Alessan­dro Giansanti said. Greek 10-year yields rose 12 ba­sis points to 8.75 per­cent, hav­ing ear­lier hit a five-week high of 8.90 per­cent, Reuters data show. sec­tor af­ter last year’s bailout hair­cut is claw­ing back bad debt. “Ar­rears man­age­ment and loan re­struc­tur­ing is one of the most chal­leng­ing is­sues cur­rently fac­ing the bank­ing sec­tor in Cyprus in its path to the restora­tion of fi­nan­cial sound­ness,” Deme­tri­ades told a con­fer­ence. Bank­ing sec­tor bad loans will be on the agenda when the troika of in­ter­na­tional lenders be­gin their third as­sess­ment of the Cypriot econ­omy tomorrow. Deme­tri­ades said Cyprus en­tered the fi­nan­cial cri­sis with large pri­vate sec­tor in­debt­ed­ness ac­cu­mu­lated over decades, sim­i­lar to the sit­u­a­tion in Ice­land, which faced a bank­ing melt­down, and in fel­low bailout re­cip­i­ent Ire­land. “Pri­vate sec­tor in­debt­ed­ness peaked at over 500 per­cent of GDP (gross do­mes­tic prod­uct) in Ice­land, and 300 per­cent in Ire­land. By com­par­i­son, pri­vate sec­tor in­debt­ed­ness stands at 300 per­cent in Cyprus,” he said. Deme­tri­ades said the prob­lem could be “ad­dressed and de­fused” such as through a tar­geted case- by-case ap­proach to debt re­struc­tur­ing, ef­fec­tive ar­rears man­age­ment and the strength­en­ing of the le­gal frame­work.


Vice Me­dia, the pro­ducer of video re­portage tar­get­ing the so­called Gen­er­a­tion Y of twen­tysome­things who do not watch much con­ven­tional tele­vi­sion, is ty­ing up with Greek tele­vi­sion broad­caster An­tenna Group. Chief Ex­ec­u­tive Shane Smith said part­ner­ing with An­tenna would en­able Vice to launch dig­i­tal chan­nels with a slate of orig­i­nal pro­gram­ming cov­er­ing news, cul­ture, mu­sic, fash­ion and sports, geared to­ward Vice’s 18- to 32-year-old core au­di­ence, faster than build­ing them piece­meal. “It’s a test of a cookie cut­ter for a new way of ex­pand­ing,” he told Reuters in a tele­phone in­ter­view. “If it works, it’s go­ing to be some­thing that we roll out around the world, which means big­ger part­ners and more tra­di­tional me­dia part­ners.”

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