Saturday, June 13, 2015

End game for Greece crisis; Russia, China gained from Snowden files; A $1trn market as Saudi Arabia opens its bourses to world

1 End game looms for Greece crisis (Helena Smith in The Guardian/Observer) Almost five months after he assumed power, Greek prime minister, Alexis Tsipras has come to a fork in the road: either he accepts the painful terms of a cash-for-reform deal that ensures Greece’s place in the single currency or he decides to go it alone, faithful to the vision of his anti-austerity Syriza party. Either way, the endgame is upon him.

Thursday’s meeting of eurozone finance ministers is viewed as the last chance to clinch a deal before Athens’s already extended bailout accord expires on 30 June. The drama of Greece’s battle to keep bankruptcy at bay has, with the ticking of the clock, become ever darker in tone. What started out as good-tempered brinkmanship has turned increasingly sour as negotiations to release desperately needed bailout funds have repeatedly hit a wall over Athens’s failure to produce persuasive reforms.

Last week the mood became more febrile as it emerged that Eurocrats, for the first time, had debated the possibility of cash-starved Athens defaulting. The revelation came amid reports that Germany’s chancellor, Angela Merkel, was resigned to letting Greece go. Berlin is by far the biggest contributor to the €240bn bailout propping up the near-bankrupt state.

With both sides seemingly determined to take negotiations to the brink, the nerve-racking game of poker was raised a notch as Tsipras’s closest aides resumed talks with technical teams in Brussels. The EU and IMF say the ball is now in Greece’s court. Following his rejection of their demands as “absurd” last week, the young premier is hoping the officials will be able to bridge outstanding differences on the basis of a new set of “counter proposals”.


2 Russia, China gained from Snowden files (BBC) UK intelligence agents have been moved because Russia and China have access to classified information which reveals how they operate, a senior government source has told the BBC. According to the Sunday Times, Moscow and Beijing have deciphered documents stolen by whistleblower Edward Snowden.

The government source said the countries "have information" that led to agents being moved but added there was "no evidence" any had been harmed. Mr Snowden leaked data two years ago. The former CIA contractor, now living in Russia, left the US in 2013 after leaking details of extensive internet and phone surveillance by American intelligence to the media.

His information made international headlines in June 2013 when the Guardian newspaper reported that the US National Security Agency was collecting the telephone records of tens of millions of Americans. Mr Snowden is believed to have downloaded 1.7 million secret documents before he left the US.


3 A $1trn market as Saudi Arabia opens its bourses to world (Muzaffar Rizvi in Khaleej Times) The opening of Saudi equities to foreign investors this week is a first step towards joining the MSCI Index by 2017, which will be raising the profile of markets in the Middle East and North Africa (Mena) by up to $1 trillion, experts say.

Analysts and experts said the opening of the Saudi bourses is a major move in international markets since China allowed foreign investment in local market more than a decade ago. They said the $570 billion market capitalisation of the kingdom is more than the combined value of the Moscow, Malaysia and Mexico markets, and that it would be the seventh-largest emerging nation in the world if it joins the MSCI Index in next two years.

Experts expect that the Saudi market may attract $10 billion to $15 billion in additional foreign inflows into the region. Banks, insurance, petrochemicals, healthcare and retail stocks will be the major beneficiaries of the Saudi move that will lead to a general shift of attention to Saudi companies and potentially pave the way for new business joint ventures and further integration of Saudi businesses into international markets, they added.

Yong-Wei Lee, head of Mena equities at Emirates NBD Asset Management, said: “Three Mena markets — the UAE [$230 billion], Qatar [$180 billion] and Egypt [$70 billion], with a combined market cap of $480 billion — are already included in the MSCI Emerging Market Index. Adding the $570 billion Saudi market, the Mena markets could top $1 trillion and that would place the region in a more prominent position than before.”

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