In Brief
Argentinean debt less risky than Greece’s The credit markets are showing that Argentina’s debt is less risky than that of Greece for the first time in seven weeks, as the South American nation’s economy grows at the fastest pace since 1992. The cost of insuring Argentine debt against nonpayment for five years with credit-default swaps fell 15 basis points, or 0.15 percentage points, to 817 this week, 27 less than similar contracts for Greece, according to CMA DataVision. Greek swaps rose 24 basis points in the same period. Argentine credit risk will remain below Greece’s as surging commodity exports boost tax revenues in South America’s second-biggest economy, according to Wells Fargo & Co. While Argentina’s economy is forecast to grow 9.7 percent this year by Morgan Stanley, the fastest in the region, Greece’s gross domestic product (GDP) may shrink 4 percent, according to the government and European Union estimates. «It is definitely a longer-term trend,» said Aryam Vazquez, an emerging-markets economist at Wells Fargo in New York. «The economy is growing and the growth outlook is very robust. But more importantly, the fiscal situation is very strong. Their financing needs aren’t even a concern now, and that clearly is not the case with Greece.» Argentina’s budget deficit will equal 0.1 percent of GDP this year, according to Morgan Stanley, which revised its estimate lower from 1 percent on August 9. Greece is seeking to reduce its budget shortfall to 8.1 percent of GDP from last year’s 13.6 percent, the highest in the 27-nation European Union after Ireland. Greece’s debt equaled 113 percent of GDP last year, more than double Argentina’s 49 percent ratio, according to data compiled by Bloomberg. (Bloomberg) British budget travel firm goes belly up LONDON (AP) – Tens of thousands of people were scrambling to make last-minute holiday plans yesterday after the collapse of British budget travel company Kiss Flights. Kiss Flights, which sold flights to Greece, Egypt, Turkey and the Canary Islands, is the third British travel company to fold in the past month and the 13th this year. The industry has been hit by lower passenger demand in the wake of the global economic downturn and the Icelandic volcanic ash cloud earlier this year that caused chaos in European skies. Kiss Flights was only operating into early yesterday after announcing its collapse on Tuesday, leaving 60,000 people to find new bookings. The UK Civil Aviation Authority has pledged to bring home the 13,000 people already abroad. Share sale Romanian property fund Fondul Proprietatea SA said it will announce a manager for the sale of its shares on the Bucharest stock exchange by August 24. The fund will pick from three groups that submitted bids to manage the sale and one brokerage, according to an e-mailed statement yesterday. The three groups are: Banca Comerciala Romana SA, Wood & Co and Intercapital Invest SA; UniCredit CAIB and KBC Securities Romania SA; and Raiffeisen Capital, ING Bank and BRD-Groupe Societe Generale SA. Romanian brokerage BT Securities SA is the independent bidder. (Bloomberg) Rights issue Greece’s National Bank will back a rights issue by its Turkish unit Finansbank as Tier 2 capital is converted into core equity, an NBG executive said yesterday. «Tier 2 capital will be converted into shares, about $350 million,» NBG CFO Anthimos Thomopoulos told Reuters. «It was a decision taken by Finansbank’s board on August 2 to raise its share capital by 551 million Turkish lira.» He said NBG would fully exercise its rights, using the proceeds from Finansbank’s maturing subordinated debt it currently holds to fund the rights issue. Greece’s largest lender also raised its direct stake in Finans Leasing to 29.9 from 2.5 percent, buying additional shares for 81.7 Turkish lira ($32.6 million), it said. Including other holdings by NBG subsidiaries in Finans Leasing, the NBG group’s total stake is now 89.1 percent. (Reuters) Ventouris dies Constantinos Ventouris, founder of Ventouris Ferries, died yesterday at the age of 83. Born on the island of Kimolos, Ventouris initially entered shipping by managing small cargo vessels before branching out into passenger ferries in the early 1980s.
