ECONOMY

In Brief

Pension funds lose 5 billion euros Greece’s social security funds are showing book losses of more than 5 billion euros due to the sliding Athens bourse, potentially creating cash flow problems for the pension system. The country’s social security funds, which are heavily invested in Greek banks, may soon have trouble meeting obligations to pension recipients as the liquidating of assets will involve incurring steep losses. The global financial crisis has dragged down Greek stocks by 67 percent in the last 12 months, with banks tumbling 71 percent. At the end of 2006, social security funds managed some 29 billion euros in assets, including shares and real estate property. This figure is believed to have shrunk to some 23 billion euros. EBRD may show first annual loss in a decade LONDON (Reuters) – The European Bank for Reconstruction and Development (EBRD) may suffer its first annual loss in a decade due to financial market turmoil hitting Central and Eastern Europe, the Financial Times reported. The EBRD is owned by around 60 mostly Western governments and funds investment in Europe and Central Asia’s ex-communist countries, where stock markets and currencies have plunged in recent weeks as investors switch to safer or more liquid assets. Russia’s benchmark RTS index fell by more than 13 percent on Friday alone. «The EBRD will be hit,» its president, Thomas Mirow, told Saturday’s edition of the FT. «I would not rule out a loss for the year but in any case we will be affected.» The FT reported that Mirow said the EBRD’s borrowers were still repaying their loans on time, but that its equity stakes in companies had suffered. IMF talks Turkish Prime Minister Recep Tayyip Erdogan said yesterday his government would not bow to demands by the International Monetary Fund (IMF), state-run Anatolia news reported. His comments coincided with an IMF visit to Ankara for post-program monitoring and intense market speculation about whether Turkey would seal a new loan deal with the fund. The country’s $10 billion standby accord with the IMF expired in May and the government is expected to decide soon what sort of deal will follow it. «In such a crisis environment, we cannot darken our future by bowing to the wishes of the IMF,» Erdogan told a regional meeting of his ruling party. (Reuters) Profits drop Saudi Telecom Co, the Arab world’s largest phone company, said third-quarter profits fell 4.1 percent, missing analysts’ estimates, as expansion costs hurt earnings. Net income declined to 3.01 billion riyals ($804 million) from 3.14 billion riyals a year earlier, the company said in a statement to the Saudi bourse, without providing earnings per share. Global Investment House KSCC had estimated third-quarter profits of 3.92 billion riyals, while EFG-Hermes Holding SAE predicted 3.5 billion riyals. The company’s net income fell 22 percent on a quarter-on-quarter basis. «We were expecting a 9 percent quarter-on-quarter decline in profits mainly due to consolidating newly acquired start-ups in South Africa, Indonesia and Turkey,» said Nadine Ghobrial, telecommunications analyst at EFG-Hermes. (Bloomberg)