Greek yields hit new year-highs
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.”