EUROCORP

Financial Morning News 22/10/2012

GREEK FINANCIAL MARKET

The General Index in Athens Stock Exchange (ASE) closed at 870.64, posting profits of 0.90% and ended at new 13-month highs, in a turnover of €77.49mn.

The Greek Prime Minister Mr. Antonis Samaras said that the issue of Greece’s debt sustainability in the medium-term is expected be resolved politically so that the country can stay in the euro-zone. He added that he did not have any reason to support the IMF proposal for euro-zone countries to take losses on their loans to Greece. Mr. Samaras also expressed confidence that the troika would produce a positive review of the economic adjustment program that would enable it to get the tranche of €31.5bn in aid by mid-November, as Greece will run out of funds by the end of November The French President Mr. Francois Hollande and the Italian Prime Minister Mr. Mario Monti had accepted his invitation to visit Athens in the near future and the dates for those visits would be announced soon.

The Finance Minister Mr. Yannis Stournaras said that Greece has covered 90% of the ground it needs to in order to secure the disbursement of its next bailout tranche. For this reason, the government is set to seal an agreement with the troika on the €13.5bn austerity package by Thursday when the Euro Working Group meets. The Euro-zone technical officials will prepare the assessment on the Greek package that will be passed to finance ministers when they hold talks, possibly via teleconference, on October 29. Then Greece will have to submit the measures to Parliament and vote on them by November 12, when the Eurogroup will hold its regular meeting.

According to German news magazine Spiegel, the Germany’s Finance Ministry is considering a debt buy-back as a possible way of reducing Greece’s debt. The Greek government could borrow money from the euro-zone’s permanent bailout fund and use this to buy back its own debt, which at present trades at around 25% of its face value. Buying just €10bn worth of Greek bonds could reduce the debt mountain by €40bn. A spokesman for the German Finance Ministry said that they do not want to engage in speculation and will wait for troika’s report.

Corporate Impacts

  • Piraeus Bank:
    The bank signed a deal to acquire Societe General’s Greek unit, Geniki Bank for €1mn. The acquisition will boost its capital ahead of its upcoming recapitalization. The investment will involve Societe General providing a €281mn capital boost to Geniki and acquiring a €163mn bond issued by Piraeus Bank.
  • Technical

    FTSE 20 December future:

      Support levels: 320-314-308. Resistance levels: 334-340-348.

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