ECONOMY

In Brief

Manufacturing contracts but at a slower pace in December Greek manufacturing contracted at a slower pace in December, with the purchasing managers’ index (PMI) rising to 48.8 from 47.3 points in November, a survey showed yesterday. The seasonally adjusted PMI composite indicator, which provides a snapshot of the performance of the manufacturing sector, rose to its highest level in four months but remained below the 50-point mark which separates contraction from growth. Output, new orders, employment and stocks of purchases kept falling, with participants citing poor economic conditions and negative media reports about the country’s financial situation as the reasons for lower demand for their goods. «Manufacturing performance in Greece remained weaker than in the eurozone during December,» said Markit economist Gemma Wallace. «However, there were some positive signs to brighten the outlook for the new year; declines in all of the aforementioned variables slowed on the month,» she added. Markit said the fall in incoming new orders was primarily due to export markets, with business from abroad declining at a steeper pace than total new orders. This suggests that domestic sales picked up on the month, Wallace said. (Reuters) Turkish bank profits rise 44 pct in the first 11 months ISTANBUL (Reuters) – Net profit for Turkey’s banks rose 44 percent in the first 11 months of 2009 to 18.8 billion lira ($12.6 billion), as banks enjoyed wider interest margins and adopted very cautious lending policies. The banks’ capital adequacy ratio was 20.4 percent in November, up from 17.5 percent in November 2008, among the highest in the world. The country’s banks, including Akbank, Garanti and Is Bank, enjoyed soaring profits throughout 2009 as a massive rate-cutting cycle by the Turkish central bank allowed them to access cheap funding and boost net interest income as they kept their own lending rates high. Substantial holdings in high-yielding Turkish bonds also helped. The sector is also regulated by strict laws put in place after a 2001 domestic financial crisis, which spared it the woes suffered by international peers. Turkish banks’ total assets rose by 11.5 percent to 803.8 billion lira, while loans rose just 4 percent to 384.8 billion lira, reflecting a reluctance among Turkish financial institutions to lend during the country’s deep recession. Analysts predict loan volumes will have to rise this year as banks can no longer rely on interest rate cuts to boost income. Bulgarian bonds Bulgaria will sell domestic bonds worth 25 million euros ($36 million) in February to diversify debt instruments and raise funds, the Finance Ministry said. The government plans to sell euro-denominated bonds with a maturity of two-and-a-half years in an auction on February 1, Finance Ministry spokeswoman Kremena Mitzeva said in e-mailed answers to questions from Bloomberg yesterday. The issue will target «insurance companies, pension and mutual funds, which have shown increased interest in Bulgarian debt,» the ministry said. The government wants to keep its public debt burden below 60 percent of gross domestic product, in line with euro-adoption requirements. (Bloomberg)