Financial Communique » Europe

Households Savings in Europe decreased in Q3 2011

Viliyana Filipova — Sun, 05 Feb 2012 10:31:09 +0000

The level of household savings in the euro area has fallen by 13.3% and the European Union (EU) – by 10.9% in the third quarter of last year compared to the second, according to the European statistics office Eurostat. Disposable income of households in the euro area has picked up its fall to 0.4% after the second quarter recorded a 0.1% decrease, indicated by Eurostat. It is the decline in disposable income due to the reduction of savings in the euro zone by Eurostat explain. Real consumption expenditure of households in the euro area but rose by 0.1 percent in the third quarter of 2011, figures show. The gross investment by households in the EU from July to September 2011 increased slightly to 8.5% from 8.4% in the previous three months. In the euro area gross investments of households remained unchanged at 9.1%. For the same period, gross business investment in non-financial corporations rose in the euro area and in all member states to respectively 21.1% and 20.5%.

The Eurozone banks are competing for 2 trillion EUR in 2012

Viliyana Filipova — Sat, 03 Dec 2011 14:54:31 +0000

The European banks to compete with the governments of the euro area to recruit 2 trillion. dollars next year because of the need for refinancing of reaching maturity bonds. In 2012 the Eurozone governments have to repay 1.1 trillion. euros and short-term bonds and 519 billion of this amount are Italian, French and German bonds reaching maturity in the first half of the year. In the first half of next year, European banks need to service their debts to 665 billion dollars by the end of December, 370 billion dollars, revealed details of Citigroup Inc.
“Serious investors flee as the bonds of European banks and government securities of euro area countries”, said Mark Grant, director of Southwest Securities Inc. “The quality of the financial performance of both the asset class is in question and nothing is being done to tackle Europe’s debt crisis”. In 2012, the European banks need to refinance an average of 230 billion dollars every three months, said Lisa Hintz, an analyst at Moody’s Corp. in New York. For comparison, the 11 quarters September 30, 2011 banks have repaid an average of 132 billion dollars, she said.
“In such a situation of scarce funding banks to compete effectively with governments,” said Hitntz. “Just look at their business model. What soft loans could obtain an Italian or Spanish bank, when the price of its financing is similar to that of government bonds, or about 7% and above? “she said.

Investors confidence in the Eurozone increased

Viliyana Filipova — Mon, 04 Jul 2011 09:07:23 +0000

The confidence of European investors has risen for the first time in four months, after oil prices retreated and the economy gained momentum. The index measuring sentiment in the 17-nation euro area rose to 5.3 from 3.5 points in June, the study of Sentix, which is one of the leaders in Germany and Europe. The indicator of current business conditions rose from 18.50 19.25, and that the expected – advanced from -10.50 to -7.75 points. In the monthly study involved 922 investors. It was conducted between June 30-July 2, and results are revised.
In the first quarter euro area recorded the strongest growth for almost a year, helped by unexpectedly strong economic growth in Germany, compensating austerity in other countries in the region. The crude oil prices fell by around 4% last month, EU finance ministers approved a loan to Greece amounted to 8.7 billion, increase confidence.
“It seems that the correction in commodity prices, especially oil, is considered as a cushion,” it said in a statement Sentix. “Improved estimates of the investors are definitely influenced the vote and support for Greece.”
“Inflation fears are far from the hysteria in February and March”.noted by Sentix. “This should reduce pressure on the ECB to raise rates.”

European banks will be put on stress tests more often

Viliyana Filipova — Sat, 21 Aug 2010 07:33:57 +0000

The European banks will be subjected to more frequent stress tests to be strengthened, thus investor confidence in the banking system in the old continent. It told the Bloomberg European Commissioner for Economic and Monetary Policy Commissioner Olli Rehn, specifying that regulatory authorities in the European Union (EU) to consider in what interval to repeat testing of credit institutions in Europe. According to Olli Rehn, stress tests are very important and useful tool for restoring confidence in the financial system and ensure transparency in the banking sector. He added that through them that will provide information for making a solid and reliable analysis of its condition. Olli Rehn plans to discuss the introduction of more frequent testing of banks with the 27 EU finance ministers at the meeting with them, which will be held on 7 September in Brussels. Financial regulators in Europe each year to undergo stress tests the largest banks in the EU. In July were tested 91 of the largest European banks, which account for 65% of the banking industry on the continent. Of these, seven did not pass, including Germany mortgage lender Hypo Real Estate Holding, Greek Agricultural Bank of Greece and five savings banks in Spain. Tests showed that they have enough capital to avoid bankruptcy in case of re-recession and depreciation of government securities.
The results of stress tests were published on July 23 and showed what the investment banks in government securities. Critics, however, were dissatisfied with their lack of rigor applied to the scenarios, which showed that banks in Europe need only 3.5 billion additional capital.

211% is the growing of equity investments in Europe

Viliyana Filipova — Thu, 29 Jul 2010 12:53:59 +0000

The volume of equity investments in Europe rose by 211 percent in the first half of 2010 on an annual basis, according to a new report. According to data from market research company unquote “value of equity investments during the period reached 25.2 billion compared with 8.1 billion for the same period of 2009. The number of transactions has also observed a significant increase of 23 percent, rising to 555 compared to 451 transactions during the first six months of 2009. Only in the second quarter of 2010 were concluded over 300 transactions, an increase of 18% compared with the first. The volume of transactions was also demonstrated these positive developments, the total value of transactions for the second quarter rose to 13.9 billion by the IRO 11.4 billion for the first, or growth of 22 percent on a quarterly basis, the report . In comparison, the volume in the second quarter of 2009 was 4.8 billion. Momentum in the sector is mainly due to purchases in which the activity increased by 56% to 167 transactions compared with 107 deals for the first six months of last year.
The value of buying four times experienced the growth to 20.7 billion euros from 5.3 mrld. euros for the first half of 2009 volume of these transactions in the second quarter rose to 11.2 billion euros from 9.5 mrld. euro first. The increase in purchases was mainly due to transactions with a single volume between 100 million and 1 billion euro, which was reported growth of 68 percent on a quarterly basis. Still very limited number of transactions worth over 1 billion. In the second quarter of 2010 occurred in only one such transaction. Although Britain remains the most active market in Europe and other established markets like Germany and the Nordic countries have also registered impressive growth.

New doubts for stress tests on European markets

Viliyana Filipova — Mon, 19 Jul 2010 18:28:27 +0000

The Greek economy is in difficulty, and its financial system is under pressure since the country became the epicenter of the biggest crisis in the history of the euro area. However now it seems that Greek banks will pass through the stress test of the banking system in Europe. A similar paradox is seen in Europe. While regulators prepare to publish the results of stress tests of the largest European banks on Friday, political and financial leaders sound surprisingly optimistic in their expectations of the outcome, writes Wall Street Journal. Sentiment among investors are fundamentally different, as many believe that some European banks experiencing serious difficulties. Given that the U.S. government made 10 of 19 largest banks in the country to attract more capital after the stress testing them in 2009, very good results in Europe may undermine the feeling of confidence that European politicians try to regain. According to economists of the Royal Bank of Scotland if the Greek banks withstand the test without a problem, the markets may appear skeptical about whether the tests were sufficiently stringent and that give an objective assessment of the state of the financial system of the Old Continent. One of the banks that tests will show that there are difficulties, the German mortgage lender Hypo Real Estate. It told the Wall Street Journal source familiar with the matter. We Hypo Real Estate is 100% government ownership, is expected to pass their toxic financial assets of 200 billion of bad bank “, supported by the Fund German financial market stabilization (SoFFin). Hypo may request a further 2 billion capital Sofiin, having already received 8 billion.
Recent optimism about the ability of stress testing to allay fears about the European banking system increase the share prices of European banks and increase the rate of the euro against the dollar and pounds. The European economy still has many challenges, as demonstrated by its decision of Moody’s credit rating to reduce Ireland and the failure of negotiations between Hungary and IMF. In Greece, the government representatives, however, remain confident about the health of banks, despite an increasing share of overdue loans and declining liquidity. Analysts said Greek banks are among those most likely to need capital after the stress tests. But his optimism with Greek government officials undermine the credibility of the entire test process. These concerns are exacerbated by the lack of transparency on the stress tests. For them, just know that will be undertaken by regulatory authorities of 20 countries whose banks will be tested and will be coordinated by the London-based Committee of European Banking Supervisors, who fight for consensus on the methodology of the tests. It is not clear how the parameters of the test will be announced along with its results Friday. In testing will involve the largest 91 banks in Europe who hold at least 50% of total banking assets in each of the participating 20 countries. This includes 16 members of the eurozone, Britain, Denmark, Poland and Sweden. Investors, bankers and some European government officials believe that to earn trust and confidence, stress test must show that there are endangered banks. Furthermore, Greek banks, analysts expect some small and medium-sized Spanish and German banks find themselves with insufficient capital.

OECD: Low euro is welcome, recession will miss the Eurozone

Viliyana Filipova — Fri, 28 May 2010 04:00:49 +0000

New recession in the euro area is unlikely, a depreciation of the euro will help reduce the negative effects that have measures to reduce the debt on economic growth, says Pier Carlo Padoan, chief economist of the Organization for Economic Cooperation and Development (OECD) said from CNBC. Governments need to pursue fiscal consolidation and reforms in the pension insurance system and labor market to promote economic growth, said Padoan. To convince skeptical financial markets in the effectiveness of its strategy, governments should also show that the coordinated work, he added. Even measures to reduce the debt limit growth in the eurozone, it will be partly offset by increased demand for European goods from Asian and other markets due to their better competitiveness resulting from weaker euro, he said. According to data from the European Central Bank the value of the euro against the U.S. dollar declined by 14% this year, while trade-weighted value of the euro has decreased by more than 10%. “Will there be a” W-shaped “recession in Europe? I do not think, “said Padoan, emphasizing that the massive debt following the global recession in 2007 – 2009,” is not just European history “and that Europe will deal with this problem faster than others.
Manufacturers in the euro area were not late to take advantage of euros due to weak international demand for increased European goods, said Padoan. “If you combine these two factors – strong growth in Asia and the weak euro, this could give a pretty good boost to European exports,” said Padoan. “Low euros in the short to medium term is very good news.” “In any case, it would be good for the world economy if the currency rates suffering a slight adjustment. The euro has certainly been overestimated for some time, while Chinese yuan was certainly underestimated. The publication of his latest economic report in this month the OECD increased its forecast for world economic growth to 4.6 percent in 2010 and 4.5 percent in 2011 than projected in November, respectively 3.4% and 3.7% growth. OECD forecast for the global labor market is also quite optimistic. The organization expected that unemployment in its member countries has reached its peak of about 8.5 percent – much lower cost than originally anticipated 10%. OECD and raise its forecast for U.S. growth to 3.2 percent this year and next than expected in November, respectively 2.5% and 2.8%.

In European Comission should be more thrifty

Viliyana Filipova — Sun, 16 May 2010 11:31:38 +0000

The European governments, which have recently been placed under intense pressure from Brussels to reduce national commitments have, in turn, the very European Commission (EC) to restrict their spending. It turns out that the Commission now considers not only to use the savings, but even increased their administrative costs for next year, according to the draft prepared for 2011 these costs increased by 4.5 per cent compared to 2010. Discussion of a draft will begin on Tuesday by finance ministers in Europe, the debate appears to be heavy, said AFP. “We agree to spend better, but not to spend more, told the agency unnamed European diplomat. “However, the European Commission is one that asks all States to make efforts to reduce budget deficits, it should do the same in their own finances,” he added. “You can not proceed as if no economic crisis.” Another condition of anonymity, a diplomat said eagerly waiting to learn why it is necessary budget committee to increase, provided that calls made to the Member States economies.
“We will not require any special skills to explain the logic of this situation.”

Optimistic start of Europe markets

Viliyana Filipova — Mon, 15 Feb 2010 22:02:45 +0000

The indexes in Europe ended with the first trading increases day of the week. Thus the old continent growth seen for the fifth time in six sessions. Today, the regional index Dow Jones Stoxx 600 advanced by 0,4 percent to 242 points. It was continued growth of 1,5 per cent achieved over the last week. Then indexes in Europe have risen in four consecutive days, but weak GDP data for the euro area led to a decline on Friday. Greece continues to be the leading news in the financial circles of the Old Continent. Today, the eurozone finance ministers meeting there to discuss the problems of our southern neighbors. ECB President Jean-Claude Trichet did ask the country to tighten its fiscal policy to overcome. Meanwhile, the EU asked Greece to provide explanations for derivative transactions, which was probably artificially lowering the budget deficit in the country. On Britain’s FTSE 100 rose by 0,5 per cent to 5 167 points, the DAX in Germany increased by 0,2 percent to 5 511 points. In France the CAC 40 advanced even by 0,3 percent to 3 609 points. In Central and Eastern Europe also overwhelming optimism. In Hungary BUX added 0.8 percent, while Romanian Beth index advanced by 0,5 percent. Exchanges in the Republic of Poland and even had achieved increases in indices of respectively 1.5 and 1,6 per cent.
Today it became clear that the Bulgarian public companies will be able to be traded and the stock exchange in Warsaw. In today’s first day of the week most markets in Asia remained closed due to meet the new lunar calendar year, as a small open trading markets recorded falls. No session today in the United States, where he celebrates the Day of the president.

Budgetary problems of Europe pull oil down

Viliyana Filipova — Tue, 09 Feb 2010 11:32:55 +0000

Quotes of the Asian oil trade fell below $ 72 a barrel after yesterday overcame declines, made late last week and reported a minimum 17-month price agency reported Reuters. Depreciation of the new “black gold” due to the oppression of stock players for uncertainty about budget problems in most euro area countries, especially Greece, Spain and Portugal. Diverging signals the degree of recovery of the economies of countries that are the biggest users Oil also confused investors on the stock markets. Price of oil on Monday was due to the intertwining of several factors: strong and sharp cooling in the U.S. geo-politics direction about Iran’s intention to begin enriching uranium, and the weakening of the dollar against five major currencies. Since the beginning of 2010, oil prices have fallen by nearly 10 percent mainly due to the increase in raw material stocks in the U.S., aggressive monetary-credit policy in China and because of doubts about the financial stability in Europe. Two hours after trading opened in London, March futures added 9 cents to $ 71.82 a barrel, after having decreased slightly in the morning. U.S. trade with appreciation Monday close of 70 cents to $ 71.89 a barrel.
At the same time when the variety Brent “March futures recorded a slight decrease of 3 cents to $ 70.08 a barrel. Most likely oil will continue to slightly cheaper, predicted analyst consulting company and Parvin Gerts in Singapore. The signal is given by Asian markets, which has moved the and Europe, but most likely the same will happen in New York.