CCTV Script 28/03/13
This is the script of CNBC's news report for China's CCTV on March 27, Wednesday.
Welcome to CNBC'S Business Daily.
Cyprus banks are finally back in business but with much stricter capital controls. Cash withdrawal limits have been capped at 300 euros per day. Businesses will not be allowed to transfer money overseas, unless the funds are used for imports. And Cypriots leaving the country can only take 3,000 euros with them.
A majority of analysts polled by Reuters say the new measures could last for months. Speaking to CNBC earlier, analysts say Euro Zone fears are continuing to dampen investor sentiment.
[Sound on tape by Andrew Pease, Global Head of Investment Strategy, Russell Investments, saying: You can see how Cyprus could unravel but it will always seemed too small to head in that direction. But really, Italy and potentially Spain are where the challenges lie. And you can't help but feel like we're headed towards at least another mini-escalation of European fears over the next few months, and that's certainly going to be a headwind on what's been so far, a pretty impressive rally on the global share markets.]
[Sound on tape by Peter Morici, Professor, Smith School of Business, University of Maryland, saying: The requirement here is that they get out of the banking business. Well what's going to replace all those jobs on that little island nation? And where will the people go that don't have the employment? They speak Greek, they're not going to go to Germany to become machinists. And remember, the European union, the troika manufactured this crisis by forcing a 53% write down on Greek debt, they essentially made those banks insolvent. If these were Frankfurt banks, I think Angela Merkel would be singing a very different tune.]
[Sound on tape by Paul Krake, Founder, View from the Peak: Macro Strategies, saying: What is relevant is comments such as that of the Dutch Finance minister, Mr. Dijsselbleom. He's opened a can of worms by saying that large depositors and senior bondholders are about to take a hit. We don't know when, but we've opened up the pre-condition that that could happen. What does that mean? Private investors have been able to buy senior bonds in Europe with the quasi-guarantee that governments in Europe will be there to backstop them. If that's taken away, credit curves have to steepen and risk assets have to suffer.]
Over in Italy, borrowing costs nudged higher at a debt auction on Wednesday. The country sold 3.9 billion euros worth of five year bonds at a yield of 3.65 percent, up from 3.59% at a previous auction.
[Sound on tape by Ray Attrill, Co-Head of FX Strategy, NAB, saying: If we're heading back up towards the 6% area on Italy for example, we've got to cross the 5% threshold first. It's clear that anything above 5% is going to be associated with additional euro pressure.]
Sentiment on Italy was also hurt after Beppe Grillo's 5-Star Movement said he would not form a coalition government with Center-left leader Pier Luigi Bersani. A February election resulted in deadlock and without an agreement between the parties, Italy might have to head back to the polls. Bersani and President Giorgio Napolitano continue talks today (Thursday).
[Sound on tape by Ray Attrill, Co-Head of FX Strategy, NAB, saying: There's obviously a heightened risk that the anti-establishment, anti-euro faction within the Italian electorate may come back with an even stronger showing from the one that we saw last month, and I think that's where the downside risks for the euro lies, as it could potentially lead us to another Northern summer of existential euro angst.]
Li Sixuan, from CNBC's Asia headquarters.