There must be a communication break down within Erste. Few weeks ago it came out downgrading the market value of its investments throughout CEE. But yesterday the same bank published a research report that advises investment in the region. To give credibility to the report the Erste resercher points to three reasons for this interesting conclusion: lower level of public debt, fiscal consolidation, lower current account deficit.
Allow me a smile with a hint of disbelief while I scratch my head. I do not even care about the reasons expressed in the report. A first year undergraduate student can identify them also as weaknesses for the region only by changing the benchmark . For example public debt looks much worse for those countries if they compare it with their OWN public debt in 2008. But this is not the point I want to discuss here.
The point is that, if those countries have to offer great investment opportunities then why is ERSTE writing down assets and “goodwill” throughout the region? It should do the exact opposite: add own capital and investment to the region. Instead ERSTE is trying to convince clients and other investors to take the risk on the region.
Could it be that it has something to sell and wants to make sure that the current price does not fall further?