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Kyle Bass: Investors Poised to Pour Billions Back Into Greek Economy

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Tuesday, 14 November 2017 02:44 PM

Economic guru Kyle Bass reportedly predicts investors are getting ready to pour billions back into the Greek economy.

The founder and chief investment officer of Hayman Capital Management, which has about $35 billion in assets under management, thinks Kyriakos Mitsotakis will win a snap election in Greece next year and become prime minister, CNBC reported.

The center-right leader is pro-foreign investor and vows to reduce taxes and speed up marquee privatizations.

After the election, Bass believes 15 billion in euros ($17.7 billion) will return to the Greek banking system and the stock market will rise.

"My best guess is a snap election for prime minister will be called between April and September of next year and Prime Minister Alexis Tsipras will lose power. When that happens, there will be a massive move into the Greek stock market. Big money will flow in as investors feel more confident with a more moderate administration.”

Meanwhile, Greece’s banks have shown progress in tackling a stockpile of non-performing loans, Bank of Greece governor Yiannis Stournaras said on Friday, but said it would remain a challenge for the country.

Greek banks are saddled with 103 billion euros in bad loans, equal to almost 60 percent of the economy, after years of financial crisis and crippling recession. The European Central Bank wants that reduced by 38 billion euros by the end of 2019.

“Incoming data point to a reduction in NPEs (non performing exposures) and this is mainly driven by loan write-offs,” Stournaras told a conference in Athens, Reuters reported.

“However, banks should utilize all the available toolbox to reduce troubled assets, and in particular speed up the sale of NPLs.”

Stournaras said high public debt and levels of unemployment were also key challenges to the Greek economy, which is starting to show signs of growth after a crippling eight-year recession which sapped a quarter of its national output.

The economy was expected to grow 1.65 percent this year and 2.4 percent the next, Stournaras said.

But moving forward, the jobless rate - at 20.6 percent, toxic loans and the public debt mountain representing almost 180 percent of national output needed to be addressed, he said.

Greece’s EU creditors have said they would consider a debt restructure, if necessary, around the time an 86 billion euro bailout program expires in August.

The Bank of Greece, Stournaras said, had put forward a specific proposal to extend the weighted average maturity of interest payments on loans issued by the European Financial Stability Facility (EFSF) by at least 8-1/2 years.

“This mild debt reprofiling proposal is vital for debt sustainability in Greece, while it involves only a negligible cost for its partners,” Stournaras said.

(Newsmax wire services contributed to this report).

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Economic guru Kyle Bass reportedly predicts investors are getting ready to pour billions back into the Greek economy.
kyle bass, investors, billions, greek, economy
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2017-44-14
Tuesday, 14 November 2017 02:44 PM
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