Further Growth expected for Intercontinental Hotel Group

Intercontinental Hotels, the world’s biggest hotel operator reported strong results in 2011, accompanied by a bumper dividend payout. The prospects for 2012 also look good as the company reports that it is over 80% booked for the Olympic games and is expecting high occupancy during the Queens Jubilee.  The Intercontinental Park Lane Hotel is a star performed in the UK with revenues up 7% in 2011.

However, the company also reports strong results in the US and China which have been the main drivers for revenue growth. Total revenues increased by 9% to $1.8bn with a corresponding increase in pre tax profits to $532m.

Greece Secures Second Bailout

Greece has avoided default through a second EU bailout in what has been labelled the biggest sovereign restructuring in history. This is on the back of quantitative easing employed by the ECB last month in the form of cheap loans to banks which has effectively subsidised their losses (or “haircuts”) in respect of Greece.  

Greece has effectively reduced its debt by approximately one third but it is still believed by many that the level of debt remaining is unsustainable and that it is only a matter of time before Greece requires further funding from the European Union.

Many businessmen continue to move their money out of Greece with billions being channelled overseas, mainly to the UK which is considered a safe haven. In particular, there has been a large influx of Greeks investing in property in London in early 2012. Over 70 Billion Euros have been withdrawn from Greece over the past 2 years.

Cypriot Banks vulnerable to Greek Bail Out

The two largest banks in Cyprus, Bank of Cyprus and Marfin Popular Bank have significant exposure with Greece. They will require significant write down of Greek bonds and are expected to request support from the Eurozones rescue fund.