The turbulence in the euro area is not over, as Greece remained only “the tip of the iceberg,” warned the professor of economics at New York University Nuriel Rubini. “This front is currently facing the euro area is the second stage of a typical financial crisis,” said Rubies to radio BBC. Approved a rescue package amounting to 750 billion, intended to stop the spread of the crisis in Greece to other EU countries do not calm the markets, as questions remain whether governments are strong enough to make the necessary rigor, stated Rubini. Earlier today it became clear that it is paid the first tranche of EUR 20 billion of aid to Greece. Tomorrow ends the maturity of the Greek bonds 8.5 billion. Markets remain worried about the solvency of some European countries in the euro area as there are significant economic and financial problems, stresses Rubini. Protests in Greece against budget cuts fueling suspicions that European governments can solve such problems, he said.
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Trade in the market for bankruptcy protection under state or contracts for protection against non-performing its obligations (credit default swaps), today passed more calmly than last week, police MarketWatch. Against this background, risk premiums of almost all countries decreased due to a narrowed and the defense costs of unserved. This happens with Spain and Greece, which last week were monitored under a magnifying glass by market participants. Not such a situation, however, with Portugal as the country risk premium went up again. According to the CMA DataVision, which provides data on the cost of credit swaps, the primary risk indicator for Greece is back below the 4 per cent and 3.97 per cent. This means that to protect the position of EUR 10 million in state bonds to Greece need to pay a premium of 397 thousand euros per year. In Spain also observed shrinkage of the risk spread, and he is now 1.61 percentage points. Although the overall stabilization of the situation, however, Portugal remained under strong pressure from the market. The country risk premium is increased to 2.34 percent from 2.27 percent on Friday.
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After a painful downturn last week, most stock indexes in Asia and the Pacific region began this week with significant increases. Optimism prevailed among investors after the United Arab Emirates (UAE) said they would support their banks, which fell into difficulty because of the insolvency of the investment fund Dubai World. Most local currencies rose, and risk premiums on corporate bonds fell. The regional index MSCI Asia Pacific, which monitors the securities markets in ten Asian countries plus Australia and New Zealand, rose 3.5 percent to 117.85 points. This is the strongest measure of stock market growth since the beginning of April this year. Today, the UAE central bank said it stands behind the credit companies in the seven Arab Emirates, and the government of China confirmed that it will not hurry to withdraw its measures to support the economy. The financial companies in the composition of the MSCI Asia Pacific contributed most to the strong increase of the index today after last week suffered the most along the news about the financial problems of Dubai. The main stock index fell in Dubai with a record 7.2 percent last year, and the Abu Dhabi stock slid more than 8%. Today was the first business day of the exchanges in the UAE, which closed late last week because of holidays in the Arab world. The Japanese Nikkei 225 rose by 2.9 percent to 9345.6 points. Shares of exporting companies rose, although the rate of the yen against the dollar increased by 0.7 percent today. This increases the cost of Japanese goods companies abroad. In India, the BSE Sensex 30 rose 1.7 percent to 914.1 points to 16 after the country’s economy grew more than expected by 7.9 percent for the period July-September compared to last year.
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Today’s session brought indexes in Asia and the Pacific region, the strongest decrease their day for the past eight months, but ended the week with a painful decline in most markets in the region. Stood at the head Japanese, Chinese and South Korean securities market, which lost between 4% and 6% of its market capitalization over the past five trading sessions. Reason for mass sales became the news of the failure of the Dubai government investment holding company Dubai World to meet its obligations to creditors. The Fund has a debt for 59 billion dollars, equivalent to most of Dubai’s foreign debt to 80 billion dollars. Meanwhile, the Japanese yen rose to its highest rate against the dollar since 1995. Financial difficulties of the Dubai World stocks fell on banks and insurers in the region, led by HSBC Holdings, whose shares fell nearly 8 percent. This is due to investor concerns about exposure of large international banks to fund Dubai. Construction companies also suffered because of the activity of the Dubai World in the construction sector. The regional index MSCI Asia Pacific, which brings together companies from stock markets in ten Asian countries plus Australia and New Zealand, slid 3.2 percent to 113.78 points. This is the strongest decrease in the stock measure within one day of 30 March so far. Financial companies in its composition have contributed most to the sharp drop in MSCI Asia Pacific. The good news that unemployment in Japan fell for the third consecutive month in October, while consumer spending increased household failed to stop reductions in the indexes. Thus MSCI Asia Pacific to cut their lead to five-year bottom of 9 March to 61 percent. For the past five trading sessions the index fell by 2,7 percent.
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