EUROCORP

Greek Morning News 25/4/2012

GREEK MARKET

The General Index closed in new low levels below 700 units for the first time since January at 697.82 posting losses of 0.62%, in a turnover of €22.68mn.

The chief of BoF Mr. Giorgos Provopoulos said that the Greece’s economy will contract by a steeper-than-expected 5% this year. Greece must stick to its reform and fiscal adjustment commitments under a bailout plan agreed with its eurozone partners and the IMF to return the economy to growth.

According to an e-mailed statement from the EU’s statistics agency, the Cyprus’s budget deficit widened to 6.3% of GDP last year from 5.3% of GDP in 2010. The public debt increased to 71.6% of GDP in 2011 from 61.5% in 2010.

Broker Meteorology

  • Banks: KBW reduced its price target for NBG to €0.70 from €0.90, for Eurobank to €0.30 from €0.44 and for Alpha Bank to €0.40 from €0.60 (underperform rating). Uncertainties remain on: 1) Additional capital needs from loan exposures (Blackrock and BoG reviews) 2) Possibility to cover some of the PSI+ losses with CoCos 3) Capital treatment of the increased DTA; 4) Conditions for the HFSF non-voting shares (warrants, maturity, etc.) and CoCos. Nomura maintained the target prices for NBG (neutral rating) and Alpha Bank (buy rating) at €3.70 and €2.30 respectively.
  • Corporate Impacts

    • Banks: Moody’s said that HFSF committed funds to each Greek bank for their recapitalization following a 53.5% nominal write down of GGBs. This commitment as credit positive because it paves the way for the recapitalization of the Greek banking system and ensures the restoration of the banks’ solvency.
    • Titan Cement: S&P revised its outlook to stable, reflecting that it will be able to sustain solid cash flows and an adequate liquidity profile over the next 24 months. It continues to cap the long-term rating on Titan at ‘BB-‘.
    • BoC: It announced annual net loss of €1.37bn from a preliminary €1.01bn, as the final results included a 74% write-down on its GGBs, compared to 60% in preliminary results announced in February. The pre-tax impairment of GGBs, including related hedging costs, amounted to €1.729bn, representing 83% of their nominal value. Excluding the impairment, it achieved a 2% rise in profit to €312mn, unchanged from the preliminary figure. It has increased its group Core Tier 1 capital by €592mn and it aims to complete capital strengthening by June 18 by placing up to €237mn in rights not exercised by their holders.
    • Technical

      • FTSE 20 June future: Support levels: 260-254-248. Resistance levels: 272-280-288.

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