ECONOMY

In Brief

Cyprus banks were not responsible for downgrade Cyprus’s banks weren’t responsible for the Mediterranean island’s downgrade by Standard & Poor’s, Efthymios Bouloutas, the chief executive officer of Marfin Popular Bank, said yesterday. Standard & Poor’s cut Cyprus’s sovereign rating by one notch, to A from A+, on Tuesday, citing increased vulnerability by the island’s financial system to Greece. The neighboring country got a 110-billion-euro ($151 billion) rescue from the European Union and the International Monetary Fund in May. Of 2.9 billion euros ($4 billion) of Greek bonds held by Marfin Popular, «1.8 billion euros expire within the next 24 months,» Bouloutas said at a shareholders’ meeting in Nicosia. Investment in Greek bonds by Hellenic Bank, Cyprus’s third- largest lender, is «very limited,» according to Glafkos Mavros, an executive director. Bank of Cyprus, the island’s largest lender, held 1.9 billion euros of Greek bonds in June, Moody’s Investors Service wrote in a report last month. Bouloutas said he expects demand for loans in Greece to start recovering in the second half of 2011. (Bloomberg) Debt chief: No Greek T-bill auctions for December Greece will not hold its regular monthly treasury bill auctions in December due to lack of investor interest during the holiday season, the Public Debt Management Agency (PDMA) said yesterday. «In line with its policy of monthly T-bill sales, the PDMA will proceed with its next auction in 2011,» PDMA chief Petros Christodoulou told Reuters. «As already known, PDMA had announced it would avoid T-bill auctions in August and December due to the holiday season,» he added. Shut out of bond markets in the wake of its debt crisis, Greece switched to monthly auctions of short-term debt in September. Borrowing costs declined for two months but rose again in November on eurozone periphery concerns. (Reuters) Energy deal Bulgaria and Qatar have signed a confidentiality deal paving the way for talks on liquefied natural gas (LNG) deliveries from the Arab country, state gas company Bulgargaz said yesterday, as Sofia seeks to cut dependence on Russian gas. Qatar is the world’s largest LNG producer. «There is a confidentiality agreement signed so that talks can start,» Bulgargaz CEO Dimitar Gogov told Reuters. «These talks will define what the quantity will be and when the deliveries will start.» Bulgaria, the poorest European Union member, has stepped up efforts to reduce its almost complete reliance on Russian gas by diversifying routes and supplies after a dispute between Russia and Ukraine in 2009 left it – and much of the region – without gas for weeks in freezing temperatures. A lack of separate gas links with neighbors and the inability to reverse gas flows in pipelines that bring Russian gas to Greece and Turkey, worsened the crisis for the Balkan country. Since then, Sofia has announced plans to link its gas network with those of Greece, Romania, Serbia and Turkey and has signed a memorandum of understanding for gas deliveries from Azerbaijan. (Reuters) Italians upbeat Italian fund managers are more optimistic about European stock markets than they have been in nine months, according to a Morningstar Inc survey. About 70 percent of the Italian investors surveyed expect an end-of-year rally in European stocks, Sara Silano, editor-in-chief at the investment research company in Milan, said in an interview. That’s the most optimistic reading since February. The share of fund managers expecting an increase in Italian stocks in the next six months also reached a nine-month high of 60 percent. «The optimism is due to better-than-expected quarterly earnings,» Silano said. «Still, fund managers expect volatility in Europe will be higher due to the sovereign debt risk of some countries.» The survey polled 20 fund managers. Europe’s STOXX-600 has risen 6.1 percent this year, rebounding 16 percent from an eight-month low on May 25. Italy’s benchmark FTSE MIB index is the third-worst performer this year among 18 Western European markets, after Greece and Spain, having lost 11 percent so far. About 95 percent of fund managers in the November survey said they expect US stocks to rise in the next six months, the highest percentage in more than one year, with none expecting a decline, Silano said. (Bloomberg)