ECONOMY

In Brief

Yields on Portugal bonds rise on deficit concerns Portugal sold 750 million euros ($1 billion) of bonds as yields driven higher by concern that the government will struggle to trim its deficit fueled demand. The debt agency sold 450 million euros of securities due October 2014 to yield 4.695 percent, a jump from the 3.621 percent at the July 28 auction. Investors bid for 3.5 times the amount offered, more than the 3.1 times in July. Portugal also sold 300 million euros of 10-year bonds, leaving the total for the auction at the low end of the 750-million-euro to 1-billion-euro range set for the sale. Demand also rose for that debt. Portuguese bonds slumped this week on concern that the government was not making as much progress trimming its budget deficit, the European Union’s fourth biggest, as other countries affected by the fallout from the Greek debt crisis, such as Ireland and Spain. The yield on Portuguese 10-year bonds rose to a record relative to benchmark German bunds on Monday as the central government shortfall widened in the first eight months. «The auction seems to have been taken down without too much difficulty after the wider spreads provided an opportunity,» said Nick Stamenkovic, a strategist in Edinburgh at RIA Capital Markets Ltd, a broker for banks and money managers. «It’s slightly disappointing they didn’t manage» to sell the maximum intended amount, he said. Portugal has already funded around 90 percent of its financing needs for this year, Finance Minister Fernando Teixeira dos Santos said on September 10, and the country doesn’t face a bond redemption until next year. (Bloomberg) Cyprus to open offshore blocks after talks NICOSIA (Reuters) – Cyprus will open new offshore blocks for hydrocarbon exploration once it has concluded consultations with its neighbors, its trade minister said yesterday. Cyprus held its first licensing round, opening up sea plots for potential hydrocarbon exploration and exploitation, in 2007. A second round was expected to follow shortly after that but delays gave rise to speculation the project had been shelved. Turkey opposes the project. Commerce, Industry and Tourism Minister Antonis Paschalides, whose ministry is responsible for energy, said preparations were under way but did not state when the second round would take place. «Consultations are continuing with neighboring countries and when all necessary consultations are concluded, the government will not hesitate to make the necessary decision for a second round,» Paschalides told reporters. He was responding to media reports the project was shelved by the Cypriot government because of objections by Turkey. Paschalides was not more specific on what consultations were required or when the talks would be concluded. He said Cyprus had signed a memorandum of cooperation with Israel this month for cooperation in the field of mapping through joint research programs in the energy sector. The island’s hydrocarbon project has triggered objections from Turkey, which Cyprus has been in conflict with for decades. Cyprus was split in a Turkish invasion in 1974 after a brief Greek inspired coup, with its ethnic Greek and Turkish populations split by a UN-controlled buffer zone. PPC bid Public Power Corporation (PPC), Greece’s largest power utility, has submitted a formal bid to build four hydropower plants in Bosnia’s Serb Republic, an Energy Ministry official said yesterday. Ten firms bought the tender documentation from regional utility Elektroprivreda RS to build the plants but only PCC submitted a formal bid for the project worth an estimated 273.2 million euros ($363.1 million), said Ljubo Glamocic, an Energy Ministry official for the autonomous region of Bosnia. The tender includes the construction of three hydropower plants on the Drina River and one on the Sutjeska River in the east of the country, with a combined capacity of 165 megawatts and annual output of 553 gigawatt-hours, he said. Glamocic said a special panel would evaluate the bid and present it to the Serb Republic government, which would then decide whether to start negotiations with PCC. (Reuters)