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Newsletter October 2013


U.S. Hedge Fund Investing in Greek Banks

John Paulson and a clutch of bullish U.S. hedge funds are leading a charge into Greek banks, confident that Greece, long seen as the weakest economy of the Eurozone periphery, is on the turn.

Such is the strength of their interest that Greece’s big banks are now lobbying the government to consider expediting reprivatisation of the long-troubled sector.

Mr Paulson, best known for his successful wager against the U.S. subprime mortgage market in 2007, praised Greece’s “very favourable pro-business government”.

“The Greek economy is improving, which should benefit the banking sector,” Mr Paulson told the Financial Times.

He confirmed his fund, Paulson & Co, had substantial stakes in Piraeus and Alpha, the two banks that have emerged in best shape from the crisis. “[Both] are now very well capitalised and poised to recover [with] good management,” he said in rare public comments.

Paulson & Co is the highest profile of the hedge funds to invest aggressively into Greek banks. Others include Baupost, Eaglevale, Dromeus Capital, Falcon Edge, York Capital and Och-Ziff, according to people close to the situation. Long-only funds, including Wellington Capital Group and Fidelity, have also taken positions.

Unlike in Spain and Ireland, where problems in the banking system caused a broader crisis, banks in Greece were largely victims of economic mismanagement. As the biggest holders of government bonds, the banks suffered heavy losses as a result of the sovereign debt restructuring.

Alpha and Piraeus have generally been seen as the most attractive bets after recapitalisation exercises earlier this year – dominated by bail-out money – still left 16 per cent and nearly 20 per cent respectively in private hands.

October 6, 2013
(Source: FT)

Vittorio Colao: Committed to Greece

Vittorio Colao, CEO of Vodafone, met with Prime Minister Antonis Samaras and declared that Vodafone will accelerate investment in 4G technology in Greece. 

Vodafone Group plans to speed up the development of 4G technology in Greece as part of its strategy to use proceeds from its Verizon deal to upgrade networks in Europe, Chief Executive Vittorio Colao said on September 13, 2013.

"Vodafone is committed to this country, to Greece," Colao told reporters in Athens after meeting Prime Minister Antonis Samaras.
Vodafone is the second-biggest operator in Greece behind Cosmote, a unit of Deutsche Telekom. "Vodafone is about to accelerate investment in 4G technology in the country," Mr. Colao said.

"This is a sign of confidence in the digital world and in Greece, and I'm very pleased with the early results and of (the) trust that Vodafone customers are expressing in this strategy," Mr. Colao said in Athens.

September 13, 2013
(Source: Reuters)

COSCO in 230-million Euro Piraeus Port Deal
China's COSCO Holdings Co Ltd has agreed a multi-million Euro expansion of its container operations at Greece's Port of  Piraeus  easing the way for the privatisation of Piraeus Port Authority SA (OLP).

Under a deal announced by Greek officials on September 2, COSCO will be excused paying fees to OLP in return for making the investment, removing a question mark over growth at the port and taking the state a step closer to selling its 74 percent stake.

"This agreement is as valuable as the initial one which brought the Chinese company to Greece," said Minister of Mercantile Marine Miltiades Varvitsiotis.

Under the terms of the agreement, COSCO will spend 230 million Euros ($303 million) to increase Piraeus's cargo handling capacity by two thirds over the next seven years to an annual 6.2 million 20-foot equivalent units (TEUs).

In exchange, the deal suspends the fixed guaranteed fees COSCO was contractually obliged to pay to OLP, until Greece's gross domestic product (GDP) returns to its pre-crisis level of 2008, "plus 2 percent each year".

Piraeus, one of Europe's busiest tourism ports handling about 20 million passengers a year mainly to and from the Greek islands, aspires to boost its cargo trade and become a gateway for Chinese trade into the region.

Its container port handled a total of 625,914 TEUs of cargo last year, up 28 percent on 2011.

September 2, 2013
(Source: Reuters)

Greece, Cyprus and Israel Sign Energy and Water Agreement
Greece, Cyprus and Israel signed a Memorandum of Mutual Understanding to cooperate in energy and water resources, in Nicosia, on August 8.

Cyprus Energy Minister Giorgos Lakkotrypis described the memorandum as being of decisive significance and Greek Environment, Energy and Climate Change Minister Yiannis Maniatis said the three countries were entering a significant and creative stage, and Cyprus and Greece were consolidating their positions in the area as factors of stability. Israeli Energy and Water Resources Minister Silvan Shalom said the cooperation would result in lower electricity costs for Cyprus.

All three expressed support for the EuroAsia Interconnector plan to link energy among the three countries by an underwater cable with a capacity to convey 2,000 MW of electric power. The project is expected to finish in 2016, is partly funded by the EU, and is expected to cost around 1.5 billion Euro.

August 9, 2013
(Source: ANA)

Six Months with a Positive Balance in Recruitments, Layoffs
102,580 new jobs were created in Greece during the first eight months of 2013, according to figures from the Ministry of Labour; 10,969 new jobs in August alone.

John Vroutsis, Minister of Labour, Social Security, and Welfare, said: "The August results of the Ergani computer application—which I received yesterday from the Ministry of Labour—confirm the assessment that unemployment rates are slowing down and the market is entering a phase of stabilisation." According to the Minister of Labour, the increase in tourism played an important role in boosting employment in August. "We should not, however, overlook the contribution of intensive work of the Labour Inspectorate, and the new high fines for undeclared work, which are the highest that have ever been imposed and have led to greater compliance by employers," Mr. Vroutsis said.

According to the same data there is also a slight increase in full-time contracts in relation to part-time contracts and job rotation. For the first eight-month period of 2013 there have been 62% (333,142) full-time contracts, 31.25% (165,327) part-time, and 5.77% (30.499) job rotation.

Prime Minister Meets with Saudi Arabia’s Prince Alwaleed Bin Talal
Prime Minister Antonis Samaras met with Saudi Arabia’s Prince Alwaleed Bin Talal, the wealthiest Arab in the world and the head of investment giant Kingdom Holding Company.

"The economic crisis hit Greece and many other countries. In Greece, however, a very harsh austerity programme was enforced. Nevertheless, I believe that Greece is likely to exit the crisis shortly, "the prince said, adding that "we are examining expanding our activities and will get back to the Prime Minister when we finish our research."

New Distinction for Costa Navarino at the Condé Nast Traveller Readers' Travel Awards
The Romanos, a Luxury Collection Resort at Costa Navarino, has been named for the third consecutive year among the “Best Overseas Holiday Hotels: Europe, Turkey and Russia” at the annual Condé Nast Traveller Readers’ Travel Awards.

For the 16th year, the readers of the UK’s leading luxury travel magazine voted their favourite destinations, hotels, villas, airlines and more.

The luxury resort received the votes of Condé Nast Traveller readers and was placed in the 7th position of the prestigious list.

The Romanos Resort, the only Greek entry in the Top 10, is one of two hotels at Navarino Dunes – Costa Navarino’s first resort in the Messinia region of the southwest Peloponnese. The distinction of the Romanos Resort further strengthens the position of Costa Navarino in Messinia among the top quality travel destinations worldwide.

Mr. Stefanos Theodoridis, CEO of TEMES, the company operating Costa Navarino, said "We are very pleased with this important recognition at the Readers' Travel Awards. It is very encouraging that the readers of Condé Nast Traveller responded and shared our vision to create a quality destination that features the unique natural beauty and history of the area. At Costa Navarino we are working continuously to develop our services, so along with excellent service and facilities of the hotel, we offer authentic cultural and sporting experiences. Our goal is for our guests to become part of our history during their stay."