In Brief
Analyst calls on investors to dip toe in market The recent fall in the value of equities on the Athens bourse amid Greece’s debt crisis offers investors the chance to make long-term gains, Leila Heckman, senior managing director at Mesirow Financial, said. Prime Minister George Papandreou’s government has raised taxes, trimmed spending and cut wages to try to lower Greece’s budget shortfall from 12.9 percent of gross domestic product last year, the largest deficit in the euro region, to 8.7 percent this year. The Athens Exchange index has fallen 9.2 percent in 2010, the worst performance among 18 Western European benchmark gauges. «While the growth, risk and momentum indicators in Greece are abysmal, the valuations are quite compelling,» Heckman said in a telephone interview on April 16. «Many crises have come and gone and the Greek crisis will get resolved. A mechanism will need to be used as it’s unsustainable for Greece to pay the interest it’s paying now.» Chicago-based Mesirow manages more than $37 billion in assets. The International Monetary Fund, the European Union and the European Central Bank are to begin meetings with their Greek counterparts in Athens this week. On April 11, the EU said it was prepared to join with the IMF to offer Greece a rescue package worth up to $61 billion if needed. «If you look at countries one year after they have gone through a debt crisis, you will see they show good equity opportunities,» Heckman said. «Cheaper markets tend to outperform in the long term and Greece looks cheap so it’s not a crazy thing to dip a toe into this market.» (Bloomberg) Iberdrola to put $2 billion in wind parks Iberdrola SA won approval to build 50 wind parks in Romania in what would be the world’s largest land-based wind-energy development and require at least $2 billion in investment. Aiming to supply power to almost 1 million homes, the Bilbao, Spain-based company acquired rights from the Romanian government to build 1,500 megawatts of capacity through 2017, its Iberdrola Renovables SA unit said yesterday in a statement. The Spanish utility has used government incentives and earned above-market rates to become world’s biggest wind-farm owner, producing low-emissions power in 10 markets including the USA and UK. With the mega-park in Romania, near its operations in neighboring Hungary, Iberdrola is set to extend its lead over second-ranked wind producer FPL Group Inc of Florida. Romania generates much of its electricity by burning oil and gas, which can be easily scaled back during windy days to allow for surges of power from windmills, said Will Young, a wind energy analyst at New Energy Finance in London. (Bloomberg) Turkish growth Eureko BV, the Netherlands-based life and health insurer, said it expects to grow its business by 20 percent in Turkey this year. The estimate compares with expansion of 8-10 percent foreseen for the Turkish insurance market as a whole, Eureko said in a written statement handed to reporters in Istanbul yesterday. (Bloomberg)
