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Hellenic Asset management : the Greek economy is finding its feet after years of financial woe

When 2008 Global financial crisis brought Greece to its knees , it took time for the country to build a strong reliable foundation to its economy.

So much so that in 2020 Athens Stick exchange was named the best performing stock market in the world at local currency terms which was a return from collapsing stock market in the financial crisis. When the crisis hit in 2008, the flow of cheap funding dried up. Greece being forced to deal its perineal balance deficits by cutting down the spending and increasing its taxes. Public sectors were able to coerce successive governments to turn the balance towards increasing taxes than cutting public spending which was unfortunate for the private sector. This in turn led to hug taxation, and as a result led to collapse in GDP and increase in bankruptcy to record unemployment.

GDP fell by 26% between 2007 and 2014, unemployment hit a high of 27.8% in September 2013 leaving 500,000 Greek professionals emigrating. Banks lost to government bonds and a staggering increase in loans of 48%. Also resulting in death blow to biparty politics which was a norm followed by military dictatorship at that time. Suriya party’s assurances to go against Brussels diktat was the radical shift which was seen. The threat of Greek banking system to leave the Eurozone with massive amounts by domestic holders was met. European central was forced to end its support to Greek banks. Syriza government tried to stabilise the situation, with a mix of pro  public sector , anti establishment policies were at best and theoretical constructs with limited applications or even worse a façade to painful remedies.

2019 , government lost a big chunk of its electoral support both in local and foreign markets making way to a Democratic Party and its liberal leader which turned the country in new direction. Laws were passed but its evident that positive stock market performance was in anticipation of economic or policy improvements and not as a result of given actions. Markets were still shut but there was an increased demand in real estate sector.

The key to Greece’s growth is country ‘s government and its citizens to break the past and follow new best practices in managing the country and its economy. Having fragile geopolitical situation the country still seems to see positive effects. Privatisation programmes led to gather momentum , Hellinkion project of infrastructure buildings , permits to gold mines released many findings of billions of euros. The sale of Athens airport , Hellenic petroleum and DEPA increased investment in building infrastructure. Greece made right moves to increase foreign direct investment and reduce unemployment.

The economy is already benefiting and recovery will continue to strengthen with the foreign’s direct investment flow from small to big corporations.

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Banking

Goldman banker hired by the Citi bank

Citigroup has hired Luisa Leyenaar-Huntingford from Goldman Sachs. This new hire is to co-head its global infrastructure franchise. Because, it seeks to win more business from cash-rich investment firms focusing on infrastructure deals. Leyenaar-Huntingford will be based in London. Responsibility will be shared with Todd Guenther in New York.

The pair will work closely with industry teams covering healthcare, industrials, natural resources and clean energy transition (NRCET), technology and communications. Leyenaar-Huntingford helped in the establishment of the Goldman’s infrastructure franchise in her time at the Wall Street bank. They will team up with Citi’s Iberia co-head of banking, capital markets and advisory (BCMA) Jorge Ramos will continue to be a senior member of the global infrastructure franchise.

The infrastructure sector is poised for further growth, according to the memo. The memo was released by Citi’s global co-heads of the alternative assets group Anthony Diamandakis and John Eydenberg, and its EMEA head of BCMA Nacho Gutierrez-Orrantia. There was significant private investment demand across the globe to deal with environmental, energy, transportation, waste, communication, digital and other social needs.

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Banks make slow progress on UK gender pay

Major banks in Britain made a slight dent in their gender pay gaps. Several insurers went backwards. Companies in Britain with more than 250 employees have been required to publish the difference between the pay and bonuses of their male and female employees. They got a reprieve due to the pandemic, last year. The financial services sector has shown one of the largest genders pay gaps in Britain. The lack of women in senior jobs is the main reason.

Pay gap data from 21 major financial institutions showed a narrowing in their average mean gender pay gap. This is just 0.4 percentage points. Banks alone had a pay gap which narrowed by one percentage point. Ann Francke, chief executive of the Chartered Management Institute said that the UK’s financial services industry has often been singled out. It really does have to get its house in order. Goldman Sachs had the widest gender pay gap in the year to April 2020. Goldman posted a gender pay gap of 51.8%. The bank told the staffs that narrowing the gap further was a critical priority. A spokesperson for banking lobby group UK Finance said, that there is clearly more still to be done.

FTSE 100 insurers Prudential, Legal & General and M&G reported a widening in their pay gaps. Prudential’s UK gender pay gap widened to 45.2%. M&G also reported a widening in its pay gap in the most recent year to 30.5%. The M&G spokesperson said that they are determined to narrow their gender pay gap and will do this by achieving better representation of women in all roles at all levels of our organization. Legal & General’s mean gender pay gap widened to 30.8%.

The insurer said that the legal & general is tackling the underlying causes of its pay gap. This is by creating a more diverse workforce and a more inclusive culture through sustained, long-term action. Admiral had a gender pay gap last year of 12.8%. The 21 firms surveyed were Barclays, HSBC, Lloyds, NatWest, Standard Chartered, Bank of America Merrill Lynch, Goldman Sachs International, JPMorgan, Morgan Stanley, UBS, Credit Suisse, Deutsche Bank, PGMS (a Phoenix unit), abrdn, Schroder Investment Management, St James’s Place, Legal & General, Prudential, Admiral Group, Aviva and M&G.

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BOJ to lower inflation target-Japan’s finance minister

Japan’s outgoing finance minister, Taro Aso, said that he had proposed lowering the central bank’s 2% inflation target. This is when the prices took a hit from plunging oil prices. He was the finance minister for nearly nine years. The slump in oil price was among the main reasons the government could not officially declare an end to deflation. In his final news conference as finance minister, Aso said that he proposed to Governor Kuroda that, with oil prices falling this much, it would be hard to achieve 2% inflation. Hence, the target must be lowered at some point. He stated this by referring to Bank of Japan (BOJ) chief Haruhiko Kuroda.

Aso also said that the governor said he would do his best to achieve the target. This is stated by adding that policymakers must scrutinise at some point, why the BOJ’s inflation target of 2% has not been met. The remarks highlight how the government and lawmakers distanced themselves from the BOJ’s target years ago, despite central bank reassurances that achieving the target was possible by maintaining or increasing stimulus.

Aso was deeply involved in negotiations with the BOJ. After Kuroda took over as governor, he deployed a massive asset-buying program. This is for pulling Japan out of deflation. Aso supported the BOJ’s stimulus efforts. He is a member of the cabinet. And also, had raised many doubts that monetary policy alone can reflate the economy out of the doldrums. New Prime Minister Fumio Kishida is set to form a cabinet.

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