EUROCORP

Financial Morning News 13/11/2012

GREEK FINANCIAL MARKET

The General Index in Athens Stock Exchange (ASE) closed at 772.85 posting heavy losses of 3.63%, with the banking sector hit sharply by news of a plan to recapitalize Greek banks, in a turnover of €74.32mn.

The eurozone finance ministers agreed to extend Greece’s fiscal adjustment period by two years. The ministers are due to meet again on Tuesday November 20 to take the week final decisions on the disbursement of the next Greek bailout tranche and the method to make the country’s debt sustainable. The Eurogroup chief Mr. Jean-Claude Juncker and the European Monetary and Economic Affairs Commissioner Mr. Olli Rehn praised the Greek government for passing the latest package of fiscal and structural reforms but the International Monetary Fund managing director Ms. Christine Lagarde suggested that some “chapters” remain to be settled.

Today, the Prime Minister Mr. Antonis Samaras will travel to Brussels to take part in the Friends of Cohesion event, coordinated by the head of the European Commission Mr. Jose Manuel Barroso, while the Finance Minister Mr. Yannis Stournaras will participate in the ECOFIN meeting of EU finance and economy ministers in Brussels.

Greece will auction a total of €3.125bn of T-bills today, split between four-week and 13-week bills.

According to troika, the plans to give Greece extra time to meet deficit-cutting targets would open up a financing gap of around €15bn through 2014 and €17.6bn in the two following years. The report gave a mixed assessment of Greece’s progress from debt to recovery, saluting the coalition government for a significant catching-up while saying that risks to the program remain very large.

The State Budget deficit for the ten months January – October 2012 amounted to €12.29bn (target: €13.57bn) and the primary deficit came at €1.17bn (target: €2.44bn). The revenues increased 1.4% to €41.73bn (€223mn above the target), while the expenditures showed an improvement on the target that had been set, amounting to €54.02bn (€904mn less than had been forecast).

Corporate Releases

    Frigoglass Q3’12 results.

    Corporate Impacts

    • Greek Banks:The banks must use common shares to achieve a core Tier 1 ratio of 6%, using convertible bonds to top up their capital needs beyond that and in order to reach a minimum 9% level. The shares will be offered at a 50% discount to their 50 day average market price. The bonds will carry a 7% annual coupon, that will rise by 50 basis points per year and which will be converted to shares at the end of five years. The Hellenic Financial Stability Fund will waive most of its voting rights, provided private investors commit to at least 10% of the rights issue. Under the terms of the recapitalization, private investors will also be issued with warrants that will allow them to buy out the government owned shares over a period of five years.
    • Titan Cement:The turnover for the first nine months of 2012 stood at €847mn (+1%), supported by indications of recovery in construction activity in the USA, and sustained momentum in the markets of the Eastern Mediterranean and the increase in exports out of Greece. The EBITDA declined by 27%, reaching €162.5mn. Net income stood at €2mn, compared to €54mn in the same period in 2011.
    • Technical

      FTSE 20 December future:

        Support levels: 274-268-262. Resistance levels: 288-296-300.

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