In Brief
Improvement seen in manufacturing sector The contraction of Greece’s manufacturing sector continued to slow in July with the purchasing managers’ index (PMI) rising to 48.8 points from 47.7 in June, a monthly survey of manufacturers showed yesterday. The data reflected the weakest deterioration in Greece’s manufacturing economy in the current sequence, with production levels and new orders stabilizing. The improvement in business conditions stemmed from the domestic market, as new work from abroad shrank at an accelerated pace. July’s reading was the highest for the PMI index since last October, although data still showed a monthly contraction. The 50-point mark separates contraction from growth. The seasonally adjusted PMI composite indicator provides a single-figure snapshot of the performance of the manufacturing sector. Job shedding across Greece’s manufacturing industry slowed to a marginal pace in July. (Reuters) Strategists tell investors to sell Greek bonds Investors should sell Greek 30-year bonds for similar-maturity Italian debt should the difference in yield, or spread, between the securities keep narrowing, according to ING Groep NV. «Within the coming months, we suggest selling the 30-year Greece and buying 30-year Italy if the 30-year spread hits the 10-basis-point area, currently in the 20-basis-point area,» Wilson Chin, a fixed-income strategist in Amsterdam, wrote yesterday in an e-mailed report. «The tighter the spread is, the greater the possibility that Greece issues at this segment of the curve. Although not announced, Greece could opt to issue at the long end in early 2010 or before as a way to seize the opportunity of tight spreads and favorable risk appetite.» (Bloomberg) Bank earnings BRD-Groupe Societe Generale SA, Romania’s second-biggest lender, said first-half profit declined 17 percent on higher costs for bad loans. Net income fell to 425 million lei ($144 million) from 514.8 million lei a year earlier, the Bucharest-based bank said in a statement to the Bucharest stock exchange yesterday. The bank almost tripled its provisions for bad loans to 408 million lei in the first half from 151 million lei a year ago. Overdue debt is soaring in Romania, as the leu has weakened about 20 percent against the euro in the past year after years of a lending boom in the common currency. The central bank’s main interest rate, at 9 percent, is the highest in the European Union, making domestic loans more expensive. Private debt soared over the previous four years along with economic growth, which last year was 7.1 percent, the fastest in the EU. The government predicts the economy will shrink by more than 4 percent this year. (Bloomberg) Bulgartabak sale Bulgaria hopes to carry out the delayed sale of its dominant cigarette maker, Bulgartabak Holding, by the end of the year, Energy and Economy Minister Traicho Traikov said yesterday. This will be the fourth attempt by the country to dispose of the former tobacco monopoly, whose key assets are the cigarette mills Sofia BT and Blagoevgrad BT. (Reuters)
