China’s equity reprieve, Greece’s new deal buoy preferreds; National Bank of Greece firms

By Stephanie N. Rotondo

Phoenix, July 10 – There were strong tailwinds pushing the preferred stock market into higher territory on Friday.

The driving factors of the day continued to be Greece and China. For its part, Greece unveiled a new debt proposal late Thursday. The reforms were expected to be evaluated as early as Friday by E.U. creditors, and the country’s government even had a vote planned for later in the day.

As for China, its stock market continued to improve, spurred in part by new supportive measures enacted this week and in part by hopes Greece can get its act together.

In the preferred space, that meant a 10 basis point gain in the Wells Fargo Hybrid and Preferred Securities index at mid-morning.

While the Greek and Chinese factors have brought a bit of a relief rally, Friday brought with it another point of focus, namely Federal Reserve chairman Janet Yellen’s speech she gave at The City Club in Cleveland at midday.

The market will be going over the speech, looking for any indications she might give as to the central bank’s thoughts on the current crisis around the world and how that might impact an interest rate increase in the United States later this year. The Fed has been maintaining that any increase would be “data dependent,” so now the market is curious as to what data matters and what does not.

In her speech, Yellen indicated optimism for the U.S. economy and expressed her belief that an interest rate increase would be needed toward the end of 2015. She also didn’t appear much fazed by what’s going on in the global economy, instead stressing her opinion that strengthening the U.S. economy is much more imperative.

National Bank of Greece rises

Greece has put a third debt reform proposal on the table, and E.U. leaders are slated to look into the plan ahead of a summit meeting on Sunday.

This latest proposal includes pension reforms and tax increases but has been labeled as more conservative by the Greeks and as potentially workable by some in the European Union, including France and Italy.

Hopes that the deal could go through gave rise to the markets across the board and also boosted National Bank of Greece SA’s $2.25 series A noncumulative preference shares (NYSE: NBGPA).

The paper closed the day up 69 cents, or 13.24%, at $5.90.

© 2015 Prospect News.
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