Greece’s plan to raise billions of euros from state-owned land may fail if the government succumbs to pressure to keep assets in public hands, according to Miltos Kambourides, managing partner at Dolphin Capital Partners.
Finance Minister George Papaconstantinou said in an interview this month that he would prefer to offer developers long-term leases, though he’d consider selling smaller assets outright. On March 23, the government said it will give details of the fundraising plan “in the coming weeks.”
“No foreign investors will want to buy a lease and be told what they should develop on the site,” said Kambourides, 38, who helped set up his private equity firm seven years ago. Dolphin, registered in the British Virgin Islands and listed on the London Stock Exchange’s AIM, is developing seven luxury resorts in Greece with a total investment budget of 2 billion euros ($2.8 billion).
Papaconstantinou aims to generate 50 billion euros from state asset sales and property transactions by 2015 to reduce Greece’s public debt, the highest in the European Union as a percentage of gross domestic product. Until now, its governments have shied away from real-estate divestments to avoid criticism from voters.
‘No Panacea’
“Asset sales are an important element in the effort to stabilize the debt level, though they’re unlikely to be a panacea,” said Silvio Peruzzo, an economist at Royal Bank of Scotland Group Plc based in London. He described the government’s target as “very ambitious.”
Greece’s economy will probably shrink for a third year under the force of cost-cutting measures that followed an EU- led, 110 billion-euro bailout last year.
Some companies may be discouraged by the country’s bureaucracy, said Kambourides, whose company had to collect 2,200 signatures from government departments and ministries to secure the luxury developments. There’s no single point of contact for the numerous permits needed, he said.
“It creates a high barrier to entry, which keeps the competition away, but it’s not good for the country,” Kambourides said.
Greece is taking steps to promote large-scale developments, such as speeding up the permit process and defining holiday homes as a tourist product so developers can build them on resorts.
New Legislation
“The government’s moving in the right direction in terms of introducing legislation, but it’s going slowly,” said Christopher Egleton, executive chairman of Minoan Group Plc (MIN), a London-based developer of leisure and tourist resorts in Greece.
Dolphin, which has bought 1,650 hectares (4,077 acres) of land in Greece for development since 2006, won’t purchase any land from the state unless it’s a freehold, Kambourides said.
“The government’s sending out mixed messages, though I think it will find a way to respond to the needs of investors,” said Yannis Perrotis, managing director of Athens-based CB Richard Ellis Atria. His company, an affiliate of the world’s largest commercial property brokerage, advises on transactions in Greece and Cyprus.
Dolphin’s property-investment unit, Dolphin Capital Investors, is building resorts at sites including Porto Heli on the shores of the Peloponnese and Plaka Bay on the island of Crete cash advance no faxing.
Holiday Homes
“Holiday homes are the most profitable part of a resort and that is what all investors are looking for,” Kambourides said. He estimates that as many as 25,000 holiday homes could be sold in a year. That would generate sales of 10 billion euros and provide a “significant” boost to gross domestic product.
A Feb. 27 poll by MRB Hellas showed that 58 percent of respondents wanted state land to be developed, not sold. Of that number, 66 percent supported laws that would stop any sale of public land. Prime Minister George Papandreou said on Feb. 15 that he would propose such a ban.
“The Greek people want to have their cake and eat it too,” Kambourides said. “They have a wrong concept of ownership, as if the land sold will be taken to another country.”
Most developers prefer to buy sites on a freehold basis because it enables them to build homes that can ultimately be sold outright, Perrotis said.
Public Access
Land sold by the state would remain accessible to the public, according to Kambourides. Investment attracted by the sales will create jobs and lift the economy after Greek unemployment reached 14.2 percent in the fourth quarter, the highest since the introduction of the euro.
The Hellenic Public Real Estate Corporation, the state’s property-management arm, has already announced that 20 plots of land, including some on the Aegean island of Samos and the port of Lavrio, will be offered for development and “ownership will remain with the Greek state.”
Kambourides began his career at Goldman Sachs Group Inc. (GS) working on real estate and private equity transactions in the U.K., France and Spain. He went on to become a founding partner of Soros Real Estate Partners before setting up Dolphin.
“The value is definitely there,” Kambourides said. “It’s more a matter of the government’s ability to carry out an orderly sales process.”
Property Disputes
The state still has some work to do: Greece is the only country in Europe without a centralized registry of deeds. About 40 percent of registered state properties are disputed and an additional 25 percent don’t have enough data on their legal status and are “questionable,” Papaconstantinou told lawmakers earlier this year.
The cumbersome approval procedures and competing claims over land resulting in lengthy court battles are both factors that have deterred foreign investment. Jones Lang LaSalle ranked Greece 29th on its Global Real Estate Transparency Index for 2010, below Spain, Italy and Portugal.
“The government still has to prove it can apply the new legislation,” Kambourides said, “‘Foreign investment will be harder to attract without a proper land-usage plan and a completed land registry.”
Fresh off a $30 million funding round, Internet publisher Cheezburger Network — known for FAIL blog and LOLcats — is expanding its New York presence by acquiring Know Your Meme.
Neither party would disclose financial details of the deal, which is rumored to be in the low seven figures.
The Web publisher known for inventing memes will now own a site dedicated to documenting them.
"There was a vacuum in our publishing portfolio," Cheezburger founder Ben Huh says. He believes Cheezburger’s readers will benefit from the addition of a site that explains viral content and evolution of stories on the Internet.
So what exactly is an Internet meme?
Were you singing Rebecca Black’s "Friday" on repeat, or asking the towel-clad "Old Spice Guy" questions on Twitter or Facebook? Remember the Double Rainbow dude?
If the answer is yes, you’re familiar with a "meme" — a catchphrase (think of Charlie Sheen’s #tigerblood) or a concept that becomes a byproduct of the Internet, spreading through e-mails, blogs and social networking sites free instant credit score.
"We try to provide a coherent timeline on how these phenomena evolve and develop through conversation," says Know Your Meme editor Brad Kim.
Know Your Meme began as an extension of video blogging site Rocketboom.
Huh plans to expand the site’s team of four employees, and to devote additional resources to building a data-based tracking system that will monitor trends from the moment they go viral.
"As Internet culture becomes greater and greater, we’ll know much more about how culture is created because we’ll have documented it," Huh says.
The acquisition is also a part of Seattle-based Cheezburger’s expansion strategy.
"We’re planning on grow our presence in New York," Huh says, citing "a significant number of people in New York that love Internet culture."
Japan’s government said the cost of the earthquake and tsunami that devastated the northeast could reach $309 billion, making it the world’s costliest natural disaster on record.
The extensive damage to housing, roads, utilities and businesses across seven prefectures (states) has resulted in losses of between 16 trillion yen ($198 billion) and 25 trillion yen ($309 billion), according to a Cabinet Office estimate Wednesday. That could drag the economic growth rate down by 0.5 percent this year.
The losses figure is considerably higher than other estimates. The World Bank on Monday said damage might reach $235 billion. Investment bank Goldman Sachs had estimated quake damage of as much as $200 billion.
If the government’s projection proves correct, it would top the overall losses from Hurricane Katrina. The 2005 megastorm that ravaged New Orleans and the surrounding region cost $125 billion, according to the Insurance Information Institute.
Japan’s estimate does not include the impact of power shortages triggered by damage to a nuclear power plant, so the final figure could be even higher. It also leaves out potential global repercussions.
“The aftermath of the tragic events in Japan will obviously alter the domestic economy,” said Takuji Aida, an economist at UBS Securities Japan, in a report. “However, Japan’s position in the global economy is such that there must also be some transmission of the shock to other parts of the world.”
The 9.0-magnitude quake and tsunami on March 11 laid waste to Japan’s northeastern coast, killing thousands of people and triggering a crisis at a nuclear power plant. Tens of thousands of people living near the plant were evacuated.
Utilities have imposed power rationing, many factories remain closed and key rail lines are impassable payday loans.
Toyota Motor Corp., the world’s No. 1 automaker, has halted auto production since March 14 because of difficulty securing components, including rubber parts and electronics. By Sunday its lost production will reach 140,000 cars.
The company said Wednesday it will delay the launch of the Prius hybrid minivan in Japan due to disruptions in parts supplies.
Toyota spokesman Paul Nolasco said the automaker initially planned to roll out the Prius minivan in April. But the disaster has crippled suppliers and destroyed shops, forcing Toyota to postpone the launch.
Another Cabinet Office economic report released Wednesday underscored the new challenges facing Japan, which had been on the mend from a lull in growth late last year.
“The economy is moving toward recovery, but its self-sustainability is weak,” it said.
More broadly, the Japanese economy has been lackluster for two decades, barely managing to eke out weak growth between slowdowns. It lost its position as world’s No. 2 economy to China last year and is saddled with a massive public debt that, at 200 percent of GDP, is the biggest among industrialized nations.
The government reportedly plans to inject public money into banks to help support lending as companies rebuild. It may finance that from a fund of 11 trillion yen ($135 billion) that is still available under a law on emergency support to banks passed after the 2008 collapse of Lehman Brothers.
Tokyo also is working on plans to provide low interest loans of up to 10 trillion yen ($122 billion) to help companies recover from quake damage, according to a news report.
Swiss Reinsurance Co. estimates its claims resulting from the eartquake in Japan will reach $1.2 billion net.
Swiss Re said Monday that the scale of destruction means it will take longer than usual to assess the damage caused to residential and commercial property.
Spokesman Rolf Tanner noted that damage to nuclear facilities and as a result of radiation contamination isn’t covered by insurance policies.
Workers at the damaged Fukushima nuclear plant are struggling to contain radiation after the cooling system was knocked out by the tsunami that followed the quake.
Zurich-based Swiss Re says it has donated $500,000 to the relief and reconstruction effort in Japan.
U.K. inflation probably accelerated to the fastest pace since October 2008 in February, which may sharpen the divide among Bank of England policy makers on whether to raise interest rates to tame price pressures.
Consumer prices rose 4.2 percent from a year earlier compared with a 4 percent increase in January, according to the median forecast of 32 economists in a Bloomberg News survey. The Office for National Statistics in London will publish the data at 9:30 a.m. on March 22.
Inflation has held above the central bank’s 2 percent target for 14 months after commodity prices surged and the pound’s 25 percent drop on a trade-weighted basis since the start of 2007 boosted import costs. Bank officials split four ways at last month’s policy meeting as they gauged the threat from inflation against the sustainability of the recovery.
“Increases in food and energy prices are creating upward pressure on inflation and that will persist for the next few months,” Adam Chester, an economist at Lloyds TSB Bank Plc in London, said in a telephone interview. “It will come back down as the economic environment remains weak.”
The Bank of England’s nine-member Monetary Policy Committee, led by Mervyn King, held its benchmark interest rate at a record low of 0.5 percent this month. Minutes of the meeting to be published a day after the inflation data will show if any other officials voted with Andrew Sentance, Martin Weale and Spencer Dale for a rate increase.
Asian markets posted solid gains Friday, and the yen retreated from historic highs, after the world’s seven major industrial nations agreed to intervene in currency markets to help earthquake-stricken Japan.
The benchmark Nikkei 225 in Tokyo rose 3.2 percent, or 285.81 points, to 9,248.48, capping a turbulent week that saw stocks lose 16 percent on Monday and Tuesday _ the first two trading days after Japan was struck by a mammoth earthquake and towering tsunami that wiped out much of its industrial northeast.
Other major Asian indexes also opened higher after mostly dour trading the day before. Hong Kong’s Hang Seng index rose 0.8 percent to 22,451.29. South Korea’s Kospi was up 1.4 percent to 1,985.91.
Finance officials from the G-7 said they had agreed on coordinated currency intervention to support Japan’s economy following a devastating earthquake. It would mark the first time the G-7 countries have jointly intervened in currency markets since the fall of 2000.
The Japanese government said it would intervene in the Tokyo market once morning trading opened, but the Finance Ministry declined later to confirm whether that happened. Finance Minister Yoshihiko Noda said the planned intervention was meant to calm “volatility” and the G-7 governments were not aiming at a specific exchange rate for the yen.
A stronger yen hurts Japan’s powerhouse export sector _ potentially dealing another problem to an economy already wracked by the biggest earthquake in its history on March 11, which crippled nuclear reactors that are still leaking radiation.
The G-7 pledge adds to a flurry of moves by Japan to calm roiled financial markets. The Bank of Japan injected an additional 6 trillion yen ($76.7 billion) in same-day funds Thursday that banks could access immediately. From Monday to Wednesday, the central bank’s emergency funding totaled 55 Business Card Holders.6 trillion yen ($688.3 billion).
In Asia on Friday, the dollar had risen to 81.80 yen after the intervention announcement. It had traded at 78.97 yen Thursday afternoon after earlier hitting 76.53 yen _ an all time low for the dollar and a record high for the yen.
The yen’s strength in the wake of the disaster has been attributed to investors expecting the Japanese to repatriate funds from overseas to pay reconstruction costs _ or in the case of insurance companies, to pay claims for the massive loss of property and life. But analysts also said they believed currency speculators had contributed to the yen’s rise.
In New York on Thursday, stocks rose broadly on signs that the U.S. economy is improving.
A gauge of manufacturing in the mid-Atlantic region jumped in February to the highest point since January 1984. The survey from the Federal Reserve’s Philadelphia branch showed new orders soared. Production at U.S. factories, mines and utilities dipped last month but was higher in previous months than first estimated, according to the Federal Reserve.
The Labor Department reported that the number of people applying for unemployment benefits fell more than economists expected last week. Ongoing claims dropped to the lowest level since October 2008.
The Standard & Poor’s 500 rose 16.84, or 1.3 percent, to 1,273.72. The Dow gained 161.29 points, or 1.4 percent, to 11,774.59. The Nasdaq rose 19.23, or 0.7 percent, to 2,636.05. The technology-heavy index is down 0.6 percent for the year.
Benchmark crude for April delivery was up $1.61 at $103.03 a barrel in electronic trading on the New York Mercantile Exchange.
Soldiers and riot police in Bahrain overran a protesters’ camp, imposed a 12-hour curfew and choked off movement nationwide Wednesday. Witnesses described helicopters firing on homes in a hunt for Shiites and attacking doctors treating the wounded, while the government called the demonstrators “outlaws” for demanding an end to the monarchy.
The nation that once led the Middle East in entrepreneurial openness went into lockdown, its government propped up by troops from Sunni Gulf neighbors fearful for their own rule and the spread of Shiite Iran’s influence.
The unrest that began last month increasingly looks like a sectarian showdown. The country’s Sunni leaders are desperate to hold power, and majority Shiites want more rights and an end to the monarchy.
Wednesday’s assault began in Pearl Square, the center of the uprising inspired by Arab revolts in Egypt and Tunisia. But the violence that left at least five people dead on Wednesday did not stop in the capital.
Doctors at the country’s main hospital said their facility was taken over by security forces, blocking physicians from either leaving or treating the wounded on site.
“There are many people injured, but we can’t bring them to the hospital because of the travel restrictions, and doctors can’t come to us,” said Ali Marsouk, a resident of the Shiite village of Sitra, who said helicopters fired on homes in a three-hour attack.
Rania Ali, another resident, said police were charging after Shiites as they sought shelter.
“I saw them chasing Shiites like they were hunting,” said Ali, a Sunni whose husband is Shiite.
The Salmaniya hospital complex has become a political hotspot. The mostly Shiite personnel are seen by authorities as possible protest sympathizers. The staff claim they must treat all who need care.
There have been moments of open anger. As overwhelmed teams treated the injured from Tuesday’s clashes, many broke out in calls to topple the monarchy.
“We are under siege,” said Nihad el-Shirawi, an intensive care doctor who said she had been working for 48 hours. “We cannot leave, and those on-call cannot come in.”
Officials in the hospital said they took in 107 injured from Wednesday’s violence. Nine were in critical condition, officials in the hospital said on condition of anonymity because they were not authorized to speak to reporters.
The Salmaniya hospital also treated 322 people injured in clashes across the kingdom on Tuesday, the official said.
The king’s announcement of a three-month emergency rule and the crackdown on Pearl Square sent a message that authorities will strike back in the strategic island nation, which hosts the U.S. Navy’s 5th Fleet.
President Barack Obama called King Abdullah of Saudi Arabia and King Hamad bin Isa Al Khalifa of Bahrain to express deep concern over the violence. White House spokesman Jay Carney said Obama stressed the need for “maximum restraint.”
Security forces barred journalists and others from moving freely. A 4 p.m to 4 a.m. curfew was imposed in most of the country.
U.S. Secretary of State Hillary Rodham Clinton said the introduction of Gulf forces was “the wrong track.”
“There is no security answer to this, and the sooner they get back to the negotiating table and start trying to answer the legitimate needs of the people, the sooner there can be a resolution that will be in the best interests of everyone,” she told CBS News.
Witnesses said at least two protesters were killed when the square was stormed. Officials at Ibn Nafees Hospital said a third protester died later. The witnesses spoke on condition of anonymity because of fear of reprisals.
A government statement said the only deaths during the raid were two policemen who were “repeatedly run over by three vehicles containing protesters.”
The government did not say whether the offensive included soldiers from other Gulf nations _ a Saudi-led force that has grown to nearly 1,000.
State TV showed military vehicles flying Bahrain’s red-and-white flag as security officials moved through the wreckage of the encampment, set up at the base of a monument to the country’s history as a pearl diving center.
During the attack, protesters fled into side streets and security forces blocked main roads into Manama. Mobile phones were apparently jammed during the height of the attack and Internet service remained at a crawl.
Hamid Zuher, a 32-year-old protester who slept at the square, said riot police first moved in on foot.
“They fired tear gas and then opened fire,” Zuher said. “We lifted our arms and started saying ‘Peaceful, Peaceful.’ Then we had to run away.”
The government said security forces came under attack from about 250 “saboteurs” hurling gasoline bombs and responded with tear gas. It denied live ammunition was used.
In Shiite villages, people went to mosques and held protest prayers. Others lit fires in anger. Clashes were reported in other mostly Shiite areas, where traffic was controlled by military forces in an apparent attempt to prevent gatherings or a surge of people toward the capital.
The government offers hints of a growing propaganda campaign. A statement said forces conducted an operation to “cleanse” Pearl Square and later state TV called the demonstrators “saboteurs” and “outlaws.”
A senior opposition leader, Abdul Jalil Khalil, believes the messages seek to bring sectarian civil war.
“And what do they think, that spreading this hate will break our will?” Khalil said. “Until now, we were defiant at Pearl Square. Now we are defiant in every village and town.”
Bahrain’s sectarian clash is increasingly viewed as an extension of the region’s rivalries between the Gulf Arab leaders and Iran. Washington, too, is being pulled deeply into the Bahrain’s conflict because of its naval base _ the Pentagon’s main Gulf counterweight to Iran.
Iranian President Mahmoud Ahmadinejad on Wednesday denounced the crackdown and the presence of the Saudi-led force.
“How is it possible to stop waves of humanity with military force?” Ahmadinejad said.
Before the rise of Dubai and Qatar’s capital Doha, the business center of the Gulf was in Bahrain. The tiny nation successfully marketed itself in the 1990s as a Western-friendly outpost for banking and financial services as a way to offset its relatively meager oil revenue. Its skyline _ now dwarfed by Dubai _ was once a symbol of the Gulf’s emergence on the world stage.
The unrest has already given a stinging blow: the cancellation of the Formula 1 season-opening Bahrain Grand Prix this month. The race is a major tourism draw and the highlight of Bahrain’s international calendar.
MEMC Electronic Materials Inc., the maker of silicon wafers for semiconductors and solar panels, surged 11 percent Monday on speculation that Japanese supply disruptions will drive up demand for its products.
Japan, devastated by a magnitude 8.9 earthquake last week, accounts for more than 50 percent of the world’s supply of the wafers, the building block of the chip and solar industries, according to a report by Barclays Capital. While MEMC, based in O’Fallon, Mo., has some operations in Japan, it also has facilities in the U.S., Europe and other parts of Asia, insulating it from the disaster.
Supply disruptions will increase prices for silicon wafers and squeeze chipmakers, which may have to raise their own prices if they want to preserve profitability, according to Barclays.
MEMC rose $1.35 to $13.37 at 4 p.m. on the New York Stock Exchange, the biggest one-day gain in almost six weeks. Shares of the company have climbed 19 percent this year.
Barclays also raised concern that makers of smartphones and their components will be harmed by shortages of capacitors made in Japan. If phone production slows, it may hurt Qualcomm Inc. and Broadcom Corp., which make chips for the devices, said Tim Luke, a Barclays analyst in New York.
Japan also is home to Toshiba Corp., which accounts for about 30 percent of the world’s output of so-called Nand flash-memory chips, according to the Barclays report. Nand handles storage for Apple Inc.’s iPhone, iPad and other mobile devices.
Disruptions in those supplies may benefit Micron Technology Inc. of Boise, Idaho, Luke said in the report.
On Friday, SanDisk Corp., which has a joint venture with Toshiba, said the earthquake in Japan caused a temporary halt to production in its two Japanese plants. The factories were “down for a short period” and are now operational again, the company said.
WASHINGTON
Don’t look now, but you and your fellow Americans are now worth trillions more, the Federal Reserve said Thursday.
The net worth of U.S. households rose to $56.8 trillion in the fourth quarter of 2010, up about $2.1 trillion from the previous quarter, according to the Fed’s latest flow of funds report. That’s up nearly 6% from the fourth quarter of 2009, when households were worth about $53.6 trillion.
The central bank defines household net worth as the difference between the value of assets and liabilities. In the fourth quarter, households had assets worth $70.7 trillion and liabilities totaling $13.9 trillion.
It was a good quarter for stocks, with the value of corporate equities held by American households rising $1 trillion to $8.5 trillion. The broad S&P 500 stock index gained over 10% in the last three months of 2010.
Overall, financial assets including stocks, bonds and real estate owned by households totaled $47.6 trillion in the quarter, up $2.3 trillion from the third quarter.
Household debt, meanwhile, continued to contract. In the fourth quarter, household debt declined 0.5%, marking over two years of falling debt levels.
Powered by WordPress -- XHTML 1.0