ECONOMY

In Brief

Gov’t will only accept cash bids for Emporiki Bank, minister says Economy Minister Giorgos Alogoskoufis told Parliament yesterday that the state will maintain its 11 percent stake in Emporiki Bank if acquisition offers are not satisfactory. «The state will accept cash or a cash equivalent and will not at any rate take the risk of other companies’ stock fluctuations,» Alogoskoufis said, in a reference to Bank of Cyprus’s cash-and-shares bid. He also said all budget figures are within target, with the course of revenues being «beyond expectations.» He insisted that the deficit will be reduced below 3 percent in 2007, despite estimates to the contrary by the European Commission, and public spending will go down to 44.7 percent of gross domestic product this year from 48.2 percent in 2004. Greece sells 2.1-bln-euro bond 9 bps above Euribor LONDON (Reuters) – Greece sold a 2.1-billion-euro ($2.65 billion), 12-year floating rate note (FRN) yesterday, the banks managing the sale said. The bond was sold at par and pays a coupon of 9 basis points over six-month Euribor, joint bookrunners Alpha Bank, EFG Eurobank, HSBC, Lehman Brothers, National Bank of Greece and Piraeus Bank said, in line with earlier spread guidance. Spyros Papanicolaou, head of Greece’s Public Debt Management Agency (PDMA), said: «This was a strategic issue, a private placement done by six banks. It was scheduled since the start of the year. It’s not extra borrowing.» A syndicate official at one of the banks said domestic investors bought most of the FRN. Greece, known in debt markets as the Hellenic Republic, holds an A1 credit rating from Moody’s Investors Service, and A credit ratings from Standard & Poor’s and Fitch Ratings. It sold a similar 3.5-billion-euro, 12-year FRN in April 2005, according to Reuters data. FDI low Greece attracted no more than $600 million (478 million euros) in foreign direct investment (FDI) during 2005, ranking last among countries of the Organization for Economic Cooperation and Development (OECD). This constituted a 71 percent decline from 2004 ($2.1 billion). Last year there was also an outpouring of $1.5 billion in FDI. In the 1996-2005 period Greece received $9.7 billion in FDI, finishing only above Iceland among OECD members. Property rates House prices rose by 7.9 percent in the first quarter of the year, a recent report by international property consultancy Knight Frank suggested, against a global average of 6.1 percent. Greece stands 13th in the world in price increases, having ranked 20th in the Q1 of 2005 with 4.2 percent. Knight Frank said the international housing market is entering a consolidation stage with the price rise rate clearly slowing down.