EU Approves Greece Assistance

Mayank Mehta
26 Mar, 2010
New York City

Greek bonds and stocks rebounded after EU leaders approved emergency assistance to Greece. Member nations agreed to provide a last resort credit facility of Greece cannot borrow from financial markets. Unipol Gruppo Finanziario SpA reported a surprise loss and said it will raise

[R]5:00 PM Frankfurt, Paris; 1:00 PM New York – Greek bonds and stocks rebounded after EU leaders approved emergency financial assistance to Greece. Member nations agreed to provide a last resort credit facility of Greece cannot borrow from financial markets. Unipol Gruppo Finanziario SpA reported a surprise loss and said it will raise €500 million through a stock sale.[/R]

European member nations approved at the of today summit in Brussels a plan to provide financial assistance if Greece cannot borrow from financial markets.

The plan brokered by France and Germany and approved by 16 member nations will lend at market rate to Greece to meet its budget requirements. The extent of the financial assistance was not released but 123jump.com contacts in the diplomatic community suggested as much as 19 billion euros available to Greece.

Member nation will contribute in accordance with their capital contribution ratio for the European Central Bank.

European Central Bank also agreed to hold off raising the quality of collateral offered by banks for short term loans. Earlier the ECB President Trichet had planned to the revised the collateral requirements at the end of 2010 to the pre-crisis level.

The ECB had planned to revise the collateral requirement to A- from the current BBB-. Current rating on Greek bonds is A2 according to Moody’s and BBB+ according to S&P. which could be lowered further by both agencies.

The eligibility of the Greek bonds for collateral beyond 2010 has been a concern to investors.

In London FTSE 100 Index closed lower 15.68 or 0.27% to 5,711.97, in Paris CAC 40 Index increased 1.99 or 0.05% to close at 4,002.47, in Frankfurt DAX index lower 1.53 or 0.02% to close at 6,131.42. In Zurich trading SMI decreased 49.18 or 0.71% to close at 6,844.99.

The ASE Index in Athens surged 3.6% and National Bank of Greece SA soared 6.8% after the EU leaders approved the Greece bailout.

Gainers & Losers

Acerinox SA, the steelmaker surged 6.2% to €14.36 after it said steel production in the second quarter will return to the pre-crisis level and the company will not extend work reduction plan.

Banca Monte dei Paschi di Siena SpA fell 3.3% to €1.13 after the bank said 2009 net interest income fell 7% to €3.64 billion from €3.90 billion a year ago. Net profit for the year fell 77% to €220.1 million compared to net profit of €953.0 million a year ago.

Fresenius SE dropped 0.5% to €55.66 after the provider of kidney dialysis was downgraded to “neutral” from “buy” at Goldman Sachs Group Inc.

HAL Holding N.V decreased 0.9% to €79.40 an investment firm said 2009 revenues fell 3% to €3.45 billion from €3.56 billion a year ago. Net profit for the year fell 9.4% to €347.2 million or €5.46 per diluted share compared to net profit of €383.1 million or €6.03 per share a year ago.

Hypo Real Estate Holding AG the real estate group said 2009 net interest income fell 12.5% to €1.4 billion from €1.6 billion a year ago. Net loss for the year was €2.24 billion compared to net loss of €5.46 billion a year ago.

Impregilo SpA added 1.4% to €2.54 after the construction group said 2009 revenues fell 8.4% to €2.71 billion from €2.96 billion a year ago. Net profit for the year fell 54% to €77.6 million compared to net profit of €167.6 million a year ago.

Koenig & Bauer AG the printing press manufacturer slipped 2.1% to €12.86.

Maisons France Confort SA advanced 3.5% to €32.50 after the homebuilder said 2009 revenues fell 21% to €395.8 million from €499.6 million a year ago. Net profit for the year fell 39% to €11.5 million compared to net profit of €18.9 million a year ago.

NRJ Group SA surged 12.3% to €7.20 after the multimedia company said 2009 revenues fell 0.4% to €330.0 mllion from €331.3 million a year ago. Net profit for the year was €6.8 million compared to net loss of €4.6 million a year ago.

Q-Cells SE rose 0.3% to €7.91 after the solar company was upgraded to “neutral” from “underperform” at Macquarie Group Ltd.

SKW Stahl-Metallurgie Holding AG rose 0.1% to €15.69.

Unipol Gruppo Finanziario SpA slipped 6.5% to €0.85 after the insurer said 2009 net earned premiums rose 24% to €9.4 bllion from €7.6 billion a year ago. Net loss for the year was €771.9 million compared to net profit of €92.6 million a year ago.

The third largest insurer also said it will raise €500 million through stock sale.

Volkswagen AG increased 3.0% to €68.61 after the carmaker planned share placing, worth around €4.5 billion, is being offered at €64 to €65 per share, according to Dow Jones report.