German Chancellor Angela Merkel will meet Greek Prime Minister George Papandreou, in Berlin Friday. On Thursday, March 04, 2010, she hosted President Hosni Mubarak of Egypt.

Greece on Thursday banned banks and hedge funds from subscribing to its latest bond sale, and it also dumped Goldman Sachs and other US investment banks as transaction managers.

The Greek government on Thursday issued a 10-year bond to raise €5 billion. The sale priced at 3.00 percentage points over the benchmark risk-free mid-swaps rate, was down from the initial guidance of 3.10 percentage points. That’s 3.26 percentage point over German bunds, the Eurozone’s benchmark.

"We targeted real money investors, like insurance companies, mutual funds, instead of banks and hedge funds – we directed the transaction away from them," Petros Christodoulou, the new head of Greece's debt management office, told the Guardian newspaper."I felt that real money investors are more long-term players, whereas [the others] are more short-term."

Leaving out hedge funds and banks is "very unusual", said Ashok Shah, chief investment officer at London & Capital."You need to have a fluid market, and you can rarely place an issue with bond investors who don't trade, they do need the market, and they need the market to be a bit calmer than what it has been."

Economic View; Monetary policy still taking a back seat:Goodbody chief economist, Dermot O’Leary, comments - - "With fiscal policies in the euro-area dominating over the past few weeks, monetary policy has very much taken a back seat. It was the same story at yesterday’s ECB press conference too, with President Trichet giving a pat on the back to the Greeks for taking further painful decisions on their public finances a day earlier. He even admitted that it was having an influence on their monetary policy discussions. If this is the case, it will have the effect of keeping ECB rates on hold for longer than we expect currently.

The newly published ECB forecasts back up this assertion. While the CPI forecast for 2011 was upgraded slightly (2010 forecast at 1.2%), the projections still see inflation at 1.5% next year, well below the ECB’s inflation target. The background for this is a fairly modest rebound in economic growth, with GDP expected to expand by only 1.5% in 2011, after a similarly modest recovery of 0.8% in 2010.

While rates will be going nowhere for some time to come, the ECB is intent on removing some of the emergency liquidity operations over the coming months, and announced further withdrawal yesterday. Overnight rates are currently well below the official ECB rate of 1%; however, Trichet was clear to point out that the ECB does not intend to bring overnight rates immediately to that level and these moves do not have any implication for monetary policy settings, which, he says, “remains appropriate”. Attention will remain on fiscal policies for the foreseeable future, with the Greeks’ meeting with Germans and French leaders over the next two days being of vital importance. The further austerity measures announced earlier in the week show the stick that the Europeans were using on the Greeks has clearly worked. It also helped in reassuring investors who bought its bonds yesterday. The Greeks are now looking for the carrot that should come in return."

S&P sees extended transition period for Basel 3 with significant grandfathering: Davy analyst Emer Lang comments: "With the issue of capital very much to the fore this week, as both ALBK and IPM addressed the topic when presenting 2009 results, we note with interest that Standard & Poor's has published a brief update on Basel 3.

S&P is broadly supportive of the Basel 3 proposals, considering that they are 'a sensible response to shortcomings in the current regulatory approach that were highlighted by the recent downturn'. It is currently reviewing the detail of the Basel 3 consultative documents and intends to publish more extensive analysis of them before the comment period ends on April 16th. However, at this early stage, it does not expect that Basel 3 is likely to have a material impact on its bank ratings, which are partly predicated on capitalisation being strengthened, before governments reduce their support of the banking system. Naturally it reserves the right to revisit this conclusion as the Basel 3 proposals move closer to their final form.

Assessing the impact of Basel 3 is a challenge. In our recent report on the Irish banks we adopted a pro-forma approach for illustrative purposes, looking at the implications as of end-June 2009 for ALBK and end-September for BKIR. The results were negative in the extreme, but many of the moving parts will have changed before final implementation, currently scheduled for end-2012.

Indeed, ALBK CEO Colm Doherty noted on March 2nd that 'trying to estimate the effect of Basel 3 for me is a fairly pointless exercise at this point in time, and I'm not particularly willing to engage in it, because I think so much will change'.

S&P suggests that the timescale for implementation will lengthen. It expects 'an extended transition period with significant grandfathering arrangements' to 'manage the risk that the global economic recovery could be jeopardised if banks are forced to focus on balance sheet strengthening at the expense of their core functions'."

Fyffes is down 4.76%.

Fruit importer Fyffes today reported a 33% increase in pre-tax profits to €21.2m for 2009 as the company increased its selling prices to offset the impact of higher costs and adverse currency movements.

Goodbody analyst, Killian Murphy commented: Fyffes; Lower guidance for FY10  -- "Fyffes’ FY09 results were slightly behind our forecasts at EPS level, at 5.2c versus 5.3c. Adjusted EBITA was slightly ahead of our expectation, at €20.7m, compared with our forecast of €20.1m. The banana business delivered a “strong increase in contribution”, while pineapples were impacted by an 'uneven supply curve as a result of climatic conditions.'

Profit from melons was slightly ahead, as a result of the closing of the loss-making Nolem. Of more interest, however, is the fact that the company is now targeting an adjusted EBITA for FY10 of €14-18m (versus €17-22m previously) due to a difficult start to the year arising from the cold weather and stronger dollar. Our current FY10 forecasts are just above the higher end of this revised range and, as a consequence, they are under review. Cash was at €36.6m, which was behind our forecast of €47m and was only slightly ahead of last year’s €32.7m. The company made a special pension contribution to reduce its pension deficit, which, nevertheless, increased from €10m to €14m."

European Benchmarks

Irish Share Prices

Irish Stock Market Capitalisation by Company

Key Index Performance Statistics

Euribor Rates

AIB Daily Report

Bank of Ireland Daily Report

Currencies