EUROCORP

Financial Morning News 01/06/2012

GREEK FINANCIAL MARKET

The General Index in Athens Stock Exchange (ASE) closed at 525.45 posting profits of 2.77% in a turnover of €168.20mn, but on May the index dropped 24.93%, while the banking index lost 35.28%.

Fitch said that a Greek exit from the euro zone could see the country’s currency devalued to half of its current level, in turn likely resulting in a default for the sovereign and its banks.

The Nobel Prize winning economist Paul Krugman said that he would be astonished if Greece managed to stay in the eurozone for longer than a year.

Greek retail sales volume fell at an annual rate of 14.3% in March, as the Greek economy continued to deteriorate and consumer spending slumped (ELSTAT).

Broker Meteorology

Barclays said that the costs of an immediate Greek exit are still too high for either Greece or the euro area. A disorderly exit would lead to a massive run on bank deposits, a meltdown of the Greek banking system, and further aggravation of Greece’s large economic downturn.

Corporate Impacts

  • Alpha Bank: It reported a net loss of €107.8mn in Q1’12 vs. a profit of €10.5mn a year ago, following a significant weakening in the economic environment. The provisions for impaired loans rose 23.2% y-o-y to €320.7mn, while net interest income fell 5% y-o-y to €408mn.
  • Eurobank: It posted a loss of €236mn in Q1’12 vs. a loss of €5mn a year ago, due to recession and losses due to write-offs of Greek sovereign debt. It raised its provisions for bad loans by 9% compared with a year earlier, to €356mn, due to worsening conditions mostly in Greece.
  • Technical

    • FTSE 20 June future: Support levels: 180-172-166. Resistance levels: 193-200-207.

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