CURRENT PROBLEMS IN PORTUGAL NOT A CRISIS - Portugal's borrowing costs rose sharply yesterday on fears of a growing political crisis in the country. Yields on the country's benchmark 10-year bonds moved above 8% at one point, while the stock market closed down 5.3%. Earlier this week, the resignations of two leading ministers put pressure on Portugal's coalition government. The European Commission President, Jose Manuel Barroso, said he was following the situation "with concern".

Justin Urquhart Stewart, of Seven Investment Management in London, says that while Mr Barroso is quite right to be worried about Portugal, this latest crisis is not as severe as that of a few years ago when Portugal required a bailout from the European Union, IMF and ECB. The analyst says that things in Portugal have changed since then. While the country still has its problems and its people are feeling quite ''miserable'', it has made progress on its debts and trade balance, while the country's unit labour costs have also fallen. He also points out that while bond yields hit 8% yesterday, they had risen as high as 16% a few years ago.

Mr Urquhart Stewart says he is confident that the ECB will stick to its commitment and will do ''whatever it takes'' to calm the situation. He says that when you consider the progress that has been made in Portugal - and elsewhere - it would be stupid of the bank not to do so. He predicts that the situation in Portugal will calm down over the next few days, adding that the country can finance itself for the short term. The underlying problems in Europe are still there, the analyst says, and until the euro zone gets a focus on a ''growth agenda'', the situation will remain quite difficult. He notes that the tone of the ECB is moving away from austerity to talk of growth. ''But as yet no-one is saying lets go and find the accelerator and put our firm firmly on it,'' he states.

On the recent rises in oil prices due to the political unrest in Egypt, the analyst says the fact that Russia is curtailing some exports to Europe is also impacting on prices. He believes that prices will not go as high as they were a few years ago. However, he says that if the situation in Egypt gets worse and the Suez Canal is cut off, a very difficult situation could develop.


MORNING BRIEFS - Traffic figures for June from Aer Lingus show the airline flew over 3% more passengers than in June last year. Short haul traffic was up 1.5% on June 2012 and long haul increased by 17.2% to 116,000.

*** Origin Enterprises - the agribusiness which is part of Aryzta - is to sell its 50% stake in its marine proteins and oils joint venture, Welcon Invest. Its being sold to Austevoll Seafoods for €93m. Origin and Austevoll formed the Welcon joint venture in 2009 after the merger of their Irish, UK and Norwegian fishmeal and fish oil operations. It makes and distributes marine based feed ingredients.

*** Oil prices went over $100 a barrel yesterday, because traders feared the fallout from the coup in Egypt could spread to the broader Middle East. US oil prices rose as high as $102.18, the highest they have been in over a year, before settling at $101.24 a barrel. Oil production in Egypt is pretty small, but the country controls the Suez Canal and pipeline, which move about 4 million barrels of oil per day. Egypt is also one of the biggest and most powerful countries in the Middle East and North Africa, a region that is home to about a third of the world's oil production.

*** Food giants Nestle and Danone are going to cut prices of some of their infant milk formula products in China, after China launched a probe into alleged price fixing by foreign infant milk makers in its $14.5 billion market. Demand for foreign brands has surged in China after tainted milk scandals there lifted foreign sales. Nestle's unit, Wyeth Nutrition, will slash prices by as much as 20%. Danone said it was co-operating with the probe and was preparing a price-cut proposal.