ECONOMY

In Brief

Cyprus economic sentiment falls slightly NICOSIA (Reuters) – Cyprus’s economic sentiment fell slightly in June after a decline in May with a poor outlook for sectors including services and construction, a publicly funded survey showed yesterday. The Economic Sentiment Indicator (ESI) fell 4.5 points in June to 62.1 points. The services sector was the most negative, with retail trade and construction also gloomy, according to the University of Cyprus, which prepared the survey. The tracker is back near levels in March after a sharp rise in April. Meanwhile, consumer sentiment saw a small rise this month compared to May. Fewer consumers noticed large increases in prices of consumer goods over the past 12 months, and fewer expect large price hikes in the coming year. Cyprus’s economy returned to growth of 0.1 percent in the first quarter of 2010 on a quarterly basis compared to a 0.3 percent contraction in the fourth quarter of 2009. Hellenic Bank set to start in Russia next year Hellenic Bank Pcl, Cyprus’s third-largest lender, said it will start full banking operations in Russia in January of next year. The Russian unit, Commercial Bank Hellenic Bank, will begin operating after acquiring a license from the Central Bank of Russia in May 2009, the Nicosia-based bank said yesterday in a statement on the website of the Cyprus Stock Exchange. «We shall focus on clients such as companies and legal entities we already know from Cyprus,» Yiannis Telonis, general manager of Hellenic Bank in Russia, said yesterday in a telephone interview. Telonis said that the decision to open business in Russia was taken after the prospects of the Russian economy improved. (Bloomberg) Potential opportunities The drop in Eastern Europe bond prices spurred by the continent’s debt crisis has created buying opportunities as governments cut spending, said Aberdeen Asset Management Plc’s Brett Diment. «The emerging market European countries have actually tackled the situation quite well,» Diment, the head of emerging market debt at Aberdeen, which oversees about $255 billion, said at «The Sovereign Debt Briefing» in London yesterday hosted by Bloomberg Link. «Contagion from the problems in Greece and Spain is potentially a buying opportunity.» Eastern European bonds have retreated since April, pushing up the extra yield investors demand to own the securities over US Treasuries, after credit rating downgrades on Greece, Spain and Portugal heightened concern governments will struggle to finance budget deficits. (Bloomberg) Cypriot bond Cyprus is considering the issue of a euro bond to raise around 1 billion euros on international markets toward the end of this year, Finance Minister Charilaos Stavrakis said yesterday. «Very roughly, we are looking at approximately 1 billion euros,» Stavrakis told Reuters. He said authorities were considering an issue between November and December. »It will probably be November,» he said. The island raised 1.0 billion euros on international markets in February with a 10-year benchmark bond. (Reuters) Metro sold The Swedish publisher of free newspapers, Metro International, said yesterday it had sold its Greek division because of the economic situation in the country, which sank the paper’s ad revenues. «The Greek [advertising] market has been affected for some time and was hard hit by the macroeconomic environment, it’s therefore clear that [the sale of the Greek division] was influenced by the crisis,» investor relations director Linda Fors told AFP. Metro International said in a statement it was selling Metro Greece to Voisins Limited, who will continue publishing the newspaper as part of a franchise agreement. (AFP) Liquidity boost National Bank of Greece, the country’s biggest lender, said yesterday it plans to sell 15 billion euros’ worth of mortgage-backed covered bonds to boost liquidity. «National Bank of Greece… has established a second 15-billion-euro covered bond program,» the lender said in a statement. National also said it has already issued the first three series of covered bonds under the program with a combined size of 3 billion euros. (Reuters)