Cyprus would seek EU bailout money 'if necessary' - BBC News Cyprus would seek EU bailout money 'if necessary' - BBC News

Sunday, June 3, 2012

Cyprus would seek EU bailout money 'if necessary' - BBC News

Cyprus would seek EU bailout money 'if necessary' - BBC News

Cyprus appears to be edging closer to a bailout, with the central bank governor saying that the country will seek European Union aid if necessary.

The comments by Panicos Demetriades, made in an interview with the Financial Times, echo remarks on Friday by president Demetris Christofias.

Cyprus had previously firmly rejected suggestions of a bailout, but its banking system is exposed to Greece.

Mr Demetriades told the FT that Cyprus was at "an important crunch time".

At the end of June, the Cyprus Popular Bank faces a deadline to find at least 1.8bn euros to meet new EU capital requirement rules.

There is a growing belief among analysts that the money will have to come from the European Financial Stability Facility.

On Friday, Mr Christofias told a news conference: "I don't take as a given that we will negotiate entry to a support mechanism, (but) I don't want to absolutely exclude it."

'Chaotic situation'

The Cypriot financial system has an exposure to Greece estimated at 23bn euros, compared with the size of the Cypriot economy of around 17.3bn euros.

Mr Christofias said officials are looking at contingency planning to "deal with a chaotic situation" if Greece leaves the eurozone.

"It is something I hope will never happen," he said.

Last year Cyprus, who credit status has been downgraded to junk by two of the three main ratings agencies, borrowed 2.5bn euros from Russia.

In his FT interview, Mr Demetriades, who became governor only last month, said further private sector or government borrowing might be possible.

But he said: "There is a backstop there and the backstop is the European Financial Stability Facility, and that backstop will be used if necessary."

Egypt Stocks Slump to Two-Month Low on Verdict, Global Economy - Businessweek

Egypt’s stocks tumbled to the lowest level in almost two months after the verdict in the trial of former President Hosni Mubarak sparked protests and on concern global economic growth is slowing.

Orascom Construction Industries (OCIC) declined to the lowest intraday level since April 22. Ezz Steel, the country’s biggest publicly traded manufacturer of the metal, lost 1.5 percent. The benchmark EGX30 Index (EGX30) dropped 1.9 percent to 4,599.13, the lowest intraday level since April 11, at 11:09 a.m. in Cairo.

A Cairo court handed life sentences to Mubarak and his interior minister Habib El-Adli for complicity in the deaths of demonstrators during last year’s apprising. It also acquitted six assistants of El-Adli of the charges related to the killings and Mubarak’s two sons of corruption charges. All decisions are subject to appeal. Thousands of demonstrators filled Cairo’s Tahrir Square within hours of the verdict to voice their discontent.

“Today’s market is definitely politically driven and the global scene is not helping make things better,” said Omar Darwish, equity sales trader at Cairo-based Commercial International Brokerage Co. “People are back in Tahrir demanding the fall of the regime as if nothing had happened over the past year and a half and this may result in the delay of the presidential election.”

EFG-Hermes Retreats

European stocks declined for the fourth week in five and U.S. shares tumbled, erasing the Dow Jones Industrial Average (INDU)’s 2012 gain. Oil dropped 3.8 percent in New York on June 1 after the Labor Department said American employers added the fewest workers in a year in May. The jobless rate in the euro region, which has been in the grips of a debt crisis for three years, reached a record high, of 11 percent in April and March.

Orascom Construction, the country’s biggest publicly traded builder, lost 1.3 percent to 254.5 pounds. Ezz Steel (ESRS) slipped to 6.55 Egyptian pounds, poised for the lowest close since April 11.

EFG-Hermes Holding SAE (HRHO) lost 0.6 percent after the biggest publicly traded Arab investment bank rejected a takeover bid from Planet IB Ltd. in favor of a joint-venture with Qatar’s QInvest LLC.

To contact the reporter on this story: Ahmed A Namatalla in Cairo at

To contact the editor responsible for this story: Claudia Maedler at

Stocks higher on housing but Europe worries linger - Yahoo Finance

NEW YORK (AP) -- Hopes that the U.S. housing market is starting to recover and the economy is on the mend sent stocks higher on Wall Street.

But the gains are being constricted from continuing worries that Greece's political deadlock could fracture the European Union and roil global markets.

The Dow Jones industrial average rose 75 points Wednesday to 12,707. The Standard & Poor's 500 added nine points to 1,340. The Nasdaq composite rose 15 points to 2,908.

Home builder stocks rose after the Commerce Department said builders started work on new homes at an annual pace of 717,000 last month, 2.6 percent more than in March. It was a heartening sign for the beleaguered housing market, which seems to be forming a bottom and starting to recover. Construction rose for both single-family homes and apartments.

Target Corp. rose after a strong earnings report. Target said revenue at stores opened at least a year rose 5.3 percent, the strongest performance in six years for that period. Target's results illustrate that Americans are beginning to spend cautiously as economic uncertainty persists. Though the job market is still shaky, falling gas prices have given shoppers hope.

As signs of a global economic slowdown persist, prices of commodities have come off highs. Oil prices continued their march downwards from $105 in the beginning of the month to $93. Crude oil prices were down $1 on Wednesday. Gold prices fell $18 to $1539, the lowest level since December.

In Europe, a potentially chaotic situation was developing in Greece, where power-sharing talks collapsed Tuesday and new elections were called for next month. There is already concern in other European countries about how a possible Greek exit from the euro would affect the rest of the continent.

On Wednesday, Spain's prime minister warned that the country, which is trembling under a 24.4 percent unemployment rate, could be locked out of international markets due to problems in the EU.

"Right now there is a serious risk that (investors) will not lend us money or they will do so at an astronomical rate," Mariano Rajoy told Spanish lawmakers.

Financial pressures extend well beyond Europe too. The Indian rupee hit a new all-time low against the dollar with investors increasingly seeking a safe place to put their money. The rupee sank to 54.44 against the dollar Wednesday, surpassing the prior low of 54.39 on December 15.

Among other stocks making big moves:

— JC Penney plunged 14 percent, the most in the S&P 500 index, after the retailer reported a bigger-than-expected first-quarter loss. Sales plummeted as shoppers are rejecting their new pricing plan.

— Abercrombie & Fitch fell 11 percent after reporting that its first-quarter net income shrank 88 percent because of higher costs and declining sales in established stores and in Europe.

— General Electric rose 3.6 percent, the most of the 30 stocks in the Dow, after the company said its finance unit will pay a special dividend of $4.5 billion to the parent company this year. It had suspended the payments in 2009 during a freeze in credit markets.

Google Has A Magic Money Making Machine - Yahoo Finance

Here's one thing that's clearer than ever after Facebook's IPO mess: Google has a magic money making machine, and it's possible no other internet company will ever have the same sort of (relatively) easy success.

The number one comparison point for Facebook as it headed towards an IPO was Google. Facebook, like Google, was a giant web company that had hundreds of millions of users. Facebook, like Google, was working on highly-targeted ads that could hit hundreds of millions of consumers.

But a funny thing happened on Facebook's path to becoming Google 2.0 (from a business perspective). Everyone suddenly realized Facebook's ads aren't that good. And everyone realized that Facebook's ads, while very good at targeting, aren't nearly as powerful or effective as Google's.

And then everyone realized Facebook isn't going to have its own magic money making machine. If it's going to make lots of money, it's going to be more of a grind to figure it out.

In our newsroom, someone threw out a good analogy for Facebook's ad business*: It's like you're at a party, standing around, talking to your friends, and someone made the posters on the wall advertisements. Maybe you'll look at them, but they're not really what you're there to do.

Google, on the other hand, is like you're walking through a grocery store looking for whatever you need and the advertiser gets to jump in at the last second and offer you what you're looking for.

As Chris Dixon has written, successful online advertising is all about purchasing intent. How do you capture commercial consumer interest?

Google's entire business is based on people asking commercial questions and giving advertisers an opportunity to provide the top 2-3 answers to the question.

That's an amazing business. And it's one Facebook doesn't have.

That's not say Facebook isn't going to figure out a way to make gobs and gobs of money. It has 900 million users. It has a team of super smart people looking to solve a hard problem. It can figure something out.

It's just not likely to be a magical money making machine like what Google has.

Don't Miss: Here's What Could Happen Next To Facebook's Stock

*We apologize if this analogy was from somewhere else and we didn't realize. Credit to whoever came up with it.

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