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RBS Books Greek, Portugal Debt Loss Amid Portfolio ‘De-Risking’

August 06, 2010, 5:58 AM EDT


By Paul Dobson

Aug. 6 (Bloomberg) -- Royal Bank of Scotland Group Plc said it sold bonds from nations such as Portugal and Greece at a loss of 105 million pounds ($167 million), “de-risking” its portfolio in the wake of the sovereign-debt crisis.
“Losses were realized during the first half of the year on disposal of a portfolio of lower-rated sovereign debt securities, including Greece and Portugal,” the Edinburgh-based bank said today as it reported earnings. “The group continued to reduce exposures to countries with credit ratings of A+ or below during the second quarter.”
Bonds from nations on Europe’s periphery slumped in the first half, with the Greek 10-year yield surging to a record of more than 12 percent, on speculation the countries would struggle to finance their debt. The losses forced a European Union and International Monetary Fund bailout, including the purchase of securities by the European Central Bank. RBS has been Britain’s biggest government-owned lender since 2008, when it was rescued in the wake of the credit crunch.
The bank, which reported its first profit today since 2007, said it disposed of 300 million pounds of Greek bonds in the second quarter. A table of available-for-sale debt securities in the statement shows holdings of Spanish, Irish and Portuguese government securities were also reduced.
The company reinvested the proceeds from maturing U.K. securities in debt from other nations among the so-called Group of 10, primarily in U.S. government securities, it said.
‘Vulnerable States’
“Euro zone country exposures were and continue to be tightly managed given the pressures on vulnerable member states,” the bank said. “Overall reductions, in-depth reviews and de-risking of portfolios were applied to Greece, Spain, Portugal, Italy and Ireland.”
Greece was cut four steps to non-investment grade, or junk, by Moody’s Investors Service on June 14, two months after Standard & Poor’s lowered its credit rating to sub-investment level. Portugal had its credit rating cut two levels to A1 by Moody’s on July 13. S&P rates Portugal A- since a downgrade on April 27, while Fitch Ratings gives the nation an AA- grade.
 
ECB Backs Temporary Ban On Naked Short Selling



The European Central Bank said today its is in favor of temporary bans on naked short selling of European credit default swaps and shares in extreme market conditions.

Still, it warned against a permanent ban.

"Limitations or bans should be limited in time and in scope in case of exceptional circumstances," the ECB said in the bounds of consultation for European Union rules.

"While a complete ban on naked short selling might potentially reduce the possible risks for the markets, the potential adverse effects of such a very restrictive measure should be carefully considered," the ECB said in the submission, published on its Website.

"Regulators should be attributed adequate powers to impose a temporary ban in order to react to extreme circumstances whereby the broad market positioning negatively impacts on the issuer.”

"If significant market speculation led by short sellers can be evidenced in future situations, a temporary short selling ban on both sovereign cash bonds and CDS markets could in such cases be agreed upon."

(Capital.gr)
 
A metà giornata troviamo lo spread/bund sul decennale al solito posto, ora intorno a 772 pb.
I CDS questa mattina segnavano un leggero incremento a 739 punti.
L'indice ASE della Borsa di Atene segna 1731 punti con un - 0,80. Volumi a 42 mln.
 
ATHENS, Aug 6 (Reuters) - Greek inflation jumped to a fresh 13-year high in July after the cash-strapped government hiked taxes to shore up its finances and comply with the terms of a huge international bailout programme. The country's statistics agency said on Friday higher energy prices and a VAT increase as of July 1 pushed consumer price inflation to 5.5 percent, its highest level since August 1997 and far outstripping the rest of the euro zone. Greek inflation stood at 5.2 percent in June and at 0.6 percent in July 2009. Increases in value added, fuel and tobacco taxes have pushed inflation much higher than expected, with many businesses passing tax increases on to customers due to lack of market competition. The EU and the IMF raised their 2010 inflation forecast for Greece to 4.75 percent from 1.9 percent on Thursday, while applauding the country's efforts to exit its debt crisis and endorsing the next payment from the bailout scheme. Greek prices rise at a much fast pace than in the rest of the euro zone, eroding household incomes and businesses' international competitiveness. Euro zone inflation inched up to 1.7 percent in July from 1.4 percent in June. Still, the July reading was lower than some analysts expected. "I expected inflation to reach 6 percent in July but price increases were relatively restrained in services," said Nikos Magginas, an economist at the National Bank of Greece. The EU and the IMF expect inflation to moderate to between to 1.5 and 2 percent next year, given a 14 percent salary cut in the public sector and a 2010 wage freeze at private businesses. While higher inflation will hit private consumption and the country's competitiveness, it may help boost nominal GDP and make it thus easier for the government to cut its deficit-to-GDP ratio. "Average inflation of 4.7 percent for this year would reduce the deficit-to-GDP ratio by 0.2 percentage points," Magginas said. Greece must reduce its 2010 budget deficit to 8.1 percent of GDP from 13.6 percent last year. (Reporting by Harry Papachristou; Additional reporting by Renee Maltezou; Editing by John Stonestreet) Keywords: GREECE CPI/ ([email protected]; +30 210 3376455; Reuters Messaging: [email protected]) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.
 
Aig: rosso trimestre 2,66 mld dlr

Gruppo Usa potrebbe cedere intera quota in Agf

06 agosto, 14:47

(ANSA) - ROMA,6 AGO - Il gruppo Usa Aig chiude il secondo trimestre con una perdita netta di 2,66 mld di dlr contro un utile di 1,82 mld del 2009. I ricavi sono stati 19,98 mld di dollari (-16%) e il gruppo ha detto di avere 'sufficiente liquidita' per i prossimi 12 mesi'. L'esposizione di Aig verso la Grecia al 30/6 e' di 937 mln di dollari e quella verso Portogallo, Italia, Irlanda, Ungheria e Spagna e' di 1,95 mld.

Aig potrebbe vendere la propria quota da 2,4 mld di dlr in American General Finance.
 
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