EUROCORP

Financial Morning News 11/05/2012

GREEK FINANCIAL MARKET

The General Index in Athens Stock Exchange (ASE) closed at 640.91 posting significant profits of 4.19%, due to the speculation that a coalition government will be formed, in a turnover of €37.56mn.

The chief of Democratic Left Mr. Fotis Kouvelis proposed the formation of an ecumenical government made up of trustworthy political figures that will reflect and respect the message from the elections.The Greek Socialist leader of PASOK Mr. Evangelos Venizelos will make the last attempt to form a government and avoid new elections. He will meet today the New Democracy leader Mr. Antonis Samaras and the chief of SYRIZA Mr. Alexis Tsipras.

The head of the EFSF Mr. Klaus Regling said that the euro zone will support Greece as long as the country sticks to its bailout agreement (WSJ).

BNP reported that a Greek exit will lead to a fall in GDP of 20%, the inflation could rise to 40% – 50% and the debt/GDP ratio would soar to over 200%.

The unemployment rate rose to 21.7% in February 2012 from 21.3% in January 2012 and 15.2% in February 2011 (ELSTAT).

The industrial production fell 8.5% in March, after declining 8.3% on the year in February (ELSTAT).

Imports rose at €4.13bn from €4.08bn the same period a year-ago and exports rose at €2.06bn from €1.86bn (ELSTAT).

Corporate Impacts

  • BoC: It posted Q1’12 net profit of €295mn vs. €74mn in Q1’11, as they were positively affected by recognition of a deferred tax asset for its impairment of Greek government bonds, and changes in the fair value of hedging derivatives used to hedge the interest rate risk of the bonds. Excluding that adjustment, earnings rose 33% to €99mn. It is obliged to meet a minimum Core Tier 1 requirement of 9% by a mid-year deadline set by the EBA and based on its expected profitability until June 30, it estimated the capital required to meet the EBA requirement at €200mn. The group expects to cover the amount through effective management of risk-weighted assets and other actions.
  • OTE: It reported Q1’12 results with a net profit of €306.6mn (est: €286.6mn) vs. €30mn the same period a year-ago, helped by the sale of a unit in Serbia and cost cuts. The sales dropped 3.6% to €1.18bn (est: €1.17bn), EBITDA increased by 6.2% to €417.5mn (est: €406.4mn).
  • Frigoglass: The net profit for Q1’12 fell by 11.1% at €7.76mn vs. €8.729mn a year ago. Sales rose at €159.1mn vs. €134.8mn (+18%), EBITDA increased by 6.9% to €24.33mn vs. €22.752mn, and operational profits rose by 0.1% at €16.56mn.
  • Cypriot Banks: The concern over whether Greece will keep the euro after the May 6 election caused an outflow of deposits to Cyprus (Phileleftheros).
  • CCH: It reported Q1’12 results with volume of €426mn down by 2% and sales of €1.44bn up by 1%. The net losses stood at €19mn (est: -€14.2mn) and the EBIT at €-2mn, hurt by austerity in debt-laden Greece and higher commodity costs. It reiterated its intention to invest 1.45 billion euros in 2012-2014.

Technical

    • FTSE 20 June future: Support levels: 236-232-226. Resistance levels: 250-258-266.

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