8 Mar, 2012, 04.38PM IST, The writer has posted comments on this articleAP Greece may avoid default as investors agree to bond swaps
ATHENS, GREECE: Greece's race to slice (euro) 107 billion ($140 billion) off its national debt entered the final stretch Thursday, with markets confident enough private investors will decide to accept a deal to write down the value of their Greek bond holdings. If too few investors agree and the swap fails, the crisis-hit country will likely default on its debt in less than two weeks, prompting renewed turmoil in financial markets and knocking confidence in the global economy. But markets appeared confident that Greece<http://economictimes.indiatimes.com/topic/Greece>would muster enough support. Greece's stock exchange was up 1.9 per cent, while the Stoxx 50 of leading European shares edged up 1 per cent. The euro was trading 0.6 per cent higher at $1.3220. Athens <http://economictimes.indiatimes.com/topic/Athens> is asking private creditors to swap their Greek bonds for new ones with a 53.5 per cent lower face value, lower interest rates and longer maturity dates. The bond swap is a radical attempt to finally pull Greece out of its debt spiral and put its shrinking economy back on the path to recovery. The hope is that by slashing the overall debt it has to repay, the country that is in a fifth year of recession can gradually return to growth. The task at hand, even with the debt reduction, is massive. Official figures released on Thursday showed unemployment shot up to a record 21 per cent in December, compared to 14.8 per cent last year, it's even worse for young people with 51.1 per cent of those aged between 15 and 24 out of work. By early on Thursday, banks, pension funds and other investors holding more than half the (euro) 206 billion ($270 billion) total debt in public hands had pledged to take part. New legislation will allow Greece to force holdouts into accepting the deal if overall participation is not high enough. Investors have until 10 p.m. local time (2000 GMT) to sign up. Only bonds held by private investors are part of the deal, meaning that outstanding amounts held by the European Central Bank and other central banks are exempt. Athens will announce the results early Friday morning, after which finance ministers of European countries using the euro are to discuss the outcome in a conference call. The complex bond swap, known as the Private Sector Involvement, or PSI, is critical for Greece to secure a (euro) 130 billion ($171 billion) package of rescue loans from other eurozone countries and the International Monetary Fund. Without the funds, Greece faces a potentially messy default that could drag down other financially vulnerable countries in Europe and threaten the joint currency itself. ``The most likely outcome remains that Greece will receive enough acceptances to move ahead with the deal and trigger the second bailout package from the EU <http://economictimes.indiatimes.com/topic/EU>,'' said Gary Jenkins <http://economictimes.indiatimes.com/topic/Gary-Jenkins>, managing director of Swordfish Research. Athens has said it needs 90 per cent participation for the deal to be successful. However, it has said it can trigger legislation to force holdouts to go along if creditors holding between 75 per cent and 90 per cent sign up. The Institute of International Finance, which has been leading the debt talks for large private creditors, said 32 firms holding (euro) 84 billion ($111 billion) of Greek bonds have agreed to the deal, including major German, French, Greek and Cypriot banks. German reinsurer Munich<http://economictimes.indiatimes.com/topic/Munich>Re, which holds some (euro) 1.6 billion ($2.1 billion) in Greek bonds, also said it will participate. On top of that, some (euro) 17.5 billion ($23 billion) in bonds owned by Greek social security funds but managed by the central bank will also be part of the swap. Five social security funds which hold about (euro) 3 billion ($3.9 billion) in bonds have voted against participating, while another eight had signed up to the deal by Thursday morning. However some creditors, notably hedge funds, are expected to hold out, hoping to scupper the deal and trigger the payment of credit default swaps _ essentially insurance against a default. The use of legislation forcing holdouts into the swap, known as ``collective action clauses'' could also trigger the payment of CDS, an event which is determined by the International Securities and Derivatives Association. On Thu, Mar 8, 2012 at 5:04 PM, ekamber <[email protected]> wrote: > ** > Budget update - India needs to fix its infrastructure - Mr Nerurkar > > - 08 Mar 2012 > > Bloomberg reported that Mr HM Nerurkar MD of TATA Steel outlined his > expectations from the government’s budget for 2012-13, slated form March > 6th 2012. > > Mr Nerurkar in an interview said “As a steel company, we would expect that > projects that have been announced should actually be on the ground. That is > the only thing that will stimulate steel demand and growth in the country.” > > He said ‘‘Investment in the infrastructure sector must go up because our > country is now getting choked in terms of roads and railways. If India has > to go somewhere near China in consumption, or if steel consumption doubles > in 10 years, how do you transport raw material, finished goods, or reach > the customer? Infrastructure is still very poor, be it ports, airports or > roads. So that stimulus is a must if business has to move fast.” > > He added ‘‘Something also needs to be done quickly for the mining industry > because last quarter mining actually contracted by 3 percent. This is quite > bad. Mining also involves a lot of infrastructure jobs, including mobile > equipment and trucks.’’ > > Source - Bloomberg > > www.steelguru.com > > > > > Words are under your control until you have spoken them, > but you come under their control once you have spoken them. > > ----- Original Message ----- > *From:* RAJESH DESAI <[email protected]> > *To:* [email protected] ; DAILY > REPORTS<[email protected]>; STOCK > BUFFS <[email protected]> ; [email protected] ; > [email protected] ; > globalspeculators<[email protected]> > *Sent:* Thursday, March 08, 2012 12:15 PM > *Subject:* Re: {LONGTERMINVESTORS} Market buzz, Whispers, Rumours, Heard > on the street...Thread. > > *Asian stocks rose for the first time this week, *as Japan’s economy > contracted less than the government’s original estimate of 2.3% to a more > positive annualised 0.7% shrink in the fourth quarter. > > On Thu, Mar 8, 2012 at 10:43 AM, ekamber <[email protected]> wrote: > >> ** >> Rise in petrol price on Friday? >> NEW DELHI: Don't be surprised if you come down with a thud from the high >> of Holi revelry <http://timesofindia.indiatimes.com/topic/Holi-revelry>the >> morning after. Top management of state-run fuel retailers were engaged >> in an informal do-or-die effort to get government nod for raising petrol >> price <http://timesofindia.indiatimes.com/topic/petrol-price> from >> Friday. >> >> The jury is out on the quantum but government sources said an increase of >> Rs 3-4 per litre is "quite possible". "The oil company brass claim the loss >> on petrol has gone beyond Rs 5 a litre and they can't take it any more. I >> won't be surprised if this time they take government's rhetoric of petrol >> being outside its control on face value and raise pump price from Friday or >> Saturday -- even at the cost of rolling back some of it and becoming the >> fall guys later," a source told TOI on Wednesday. >> >> Top executives from fuel retailers had on Tuesday discussed the issue >> with top oil ministry officials. On Wednesday too their efforts continued >> till late in the evening. The message to the government was clear: Any >> further delay in raising petrol price may affect their ratings and block >> ability to borrow money. The foreign borrowings of IndianOil >> Corporation<http://timesofindia.indiatimes.com/topic/IndianOil-Corporation>, >> India's largest fuel retailer with about 55% market share, has topped $6 >> billion as the company had to borrow more and more to meet daily >> operational expenses. >> >> >> http://timesofindia.indiatimes.com/business/india-business/Rise-in-petrol-price-on-Friday/articleshow/12181111.cms >> > > > > -- > CA. Rajesh Desai > > -- CA. Rajesh Desai -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
