EUROCORP

Financial Morning News 31/05/2012

GREEK FINANCIAL MARKET

The General Index in Athens Stock Exchange (ASE) closed at 511.29 posting losses of 3.19% in a turnover of €36.01mn, as a new public opinion poll showed the radical left Syriza party taking the lead ahead of the June polls.

The European Commission said that Greece will need to pick up the pace of reforms in order to secure future funding from international creditors. It reiterated that the economy is seen contracting at an annual pace of 4.7% in 2012.

Corporate Releases

  • 05/31: Alpha Bank, Eurobank Q1’12 results.

Broker Meteorology

  • OTE: UBS reduced its target price to €2.00 from €4.90 (neutral rating), due to higher weighted average cost of capital in Greece, Romania and Bulgaria.
  • MOH: Merrill Lynch reiterates its buy recommendation and price objective at €8.30, due to the strong cash flows, the competitively advantaged refining asset base and the high dividend yield. UBS maintains its buy rating and price target at €11.00, as it traded at 4.3 x EV/EBITDA (FY12E) vs. European refiners at 6.7x vs. US at 2.8x.

Corporate Impacts

  • Banks: The head of the Hellenic Financial Stability Fund said that cash injection of €18bn boosts the capital adequacy to8%, which gives them the ability to get financing from the ECB. The banks will present their restructuring plans in three months and they will be set out in presidential decree.
  • Intralot: The revenues in Q1’12 increased by 15.4% to €347.2mn, while EBITDA increased by 6.9% to €41.7mn, due to the strong diversification and internationalization of its business and despite the adverse sports betting results that impacted the industry. The quarter was cash-flow positive as net debt dropped by €9.6m.
  • NBG: It reported a net loss of €537mn in Q1’12 vs. €157mn profit a year earlier, as provisions for non-performing loans surged by 47% to €539mn. The loan-to-deposit ratio for the group as a whole stood at a relatively robust 111% and 105% for Greece. The Chief Executive Apostolos Tamvakakis said the bank had adequate cash reserves to deal with the outflow and that deposit flight had eased in the first two months of the second quarter.
  • Piraeus Bank: It reported a pretax loss of €80mn, after a €17mn profit in the same period a year earlier. Net profit rose to €298mn from €8mn a year earlier, helped by deferred tax benefit related to the country’s private-sector involvement program on its sovereign debt. The deposits in Greece fell 6% q-o-q to €17.1bn. The CEO Mr. Stavros Lekkakos said that provision expenses of €296mn increased significantly 78% due to the deterioration in economic conditions in Greece where gross domestic product for the same quarter contracted by 6.2% y-o-y.

Technical

  • FTSE 20 June future: Support levels: 180-172-166. Resistance levels: 190-198-207.

Financial Morning News 30/05/2012

GREEK FINANCIAL MARKET

The General Index in Athens Stock Exchange (ASE) closed at 528.14 posting profits of 1.86% in a turnover of €38.35mn.

The EC’s spokesperson for Economic and Monetary Affairs Mr. Amadeu Altafaj said that Greece needs to do more to clamp down on tax evasion, stressing that reform to the tax system is one of the most fundamental components of the country’s bailout agreement with its creditors. He added that there will be no mission to Greece from the country΄s official lenders until a new government is in place.

ECB Governing Council member Mr. Ewald Nowotny said that the prime objective is to keep Greece in the euro area, adding that this is something that doesn’t only depend on the side of the European authorities, but also on the decisions of Greek people and their government.

Corporate Releases

  • 05/30: NBG, Piraeus Bank, FF Group, MOH, Terna Energy Q1’12 results
  • 05/31: Alpha Bank, Eurobank Q1’12 results

Broker Meteorology

Credit Suisse estimates that If Greece were to exit the euro zone, the S&P 500 would likely fall to 1200, putting the probability of such an event occurring in 2012 at 20% vs.15% previously.

Corporate Impacts

  • Hellenic Petroleum: It reported net profit of €45mn (est: €28.2mn) for the first quarter (+1%), as cost savings helped offset slumping fuel demand. EBITDA were up by 4.2% to €75mn (est: €77.3mn). The start-up of the Elefsina refinery in the next few weeks will highlight a turning point for the group.
  • GEK Terna: Its subsidiary, Terna signed a contract of €21.7mn for the construction of the project Tirana Business Park in Albania.
  • PPC: It reported a €1.4mn net loss in Q1’12 (est: profits of €62.1mn) vs. a net profit of €93.3mn in Q1’11 due to higher fuel and energy purchase costs. The turnover increased to €1.55bn (est: €1.53bn) vs. €1.37bn, while EBITDA was €232mn (est: €304bn), down from €327mn. The Chief Executive Mr. Arthouros Zervos said that he expects full-year EBITDA margin to reach the budgeted level, as long as macroeconomic environment don’t deteriorate further.
  • Cyprus Popular Bank: It posted a 23% drop in first-quarter net profit at €54.8mn, as the worsening situation in the Greek market took its toll on the bank’s loan portfolio. The net profit included a deferred tax asset of €84.7mn relating to its massive write-down of GGBs (€2.8mn).Net interest income fell by 2% on a yearly basis, reflecting a deleveraging of its loan portfolio and lower deposit spreads. EBA expects the bank to replenish its capital by €1.9bn to reach a core tier 1 capital level of 9% June 30.

Technical

  • FTSE 20 June future: Support levels: 180-172-166. Resistance levels: 196-202-210.

Financial Morning News 29/05/2012

GREEK FINANCIAL MARKET

The General Index in Athens Stock Exchange (ASE) closed at 518.49 posting significant profits of 6.87% in a turnover of €28.74mn, as recent polls indicated that conservative New Democracy could come first in the June 17 vote, slightly ahead of the anti-austerity radical left Syriza party.

A leading broker, Newedge is abandoning the Greek stock market in a sign of mounting concern over the country’s future in the eurozone. The broker has told clients that it will process only sell orders and stop extending margin loans for existing positions in Greek securities (Financial Times).

Corporate Releases

  • 05/29: Cyprus Popular Bank, ELPE, Fourlis, PPC Q1’12 results, Frigoglass AGM
  • 05/30: NBG, Piraeus Bank, FF Group, MOH, Terna Energy Q1’12 results
  • 05/31: Alpha Bank, Eurobank Q1’12 results

Corporate Impacts

  • MOH: It posted net profits of €39.4mn (est: €30.9mn) in Q1’12 vs. €62.3mn (-37%) the same period a year ago, due to sharp fluctuations in the euro-dollar exchange rate and the global oil price. Stripping out the value of oil inventories, which fluctuates with oil prices, the company increased adjusted pre-tax profit to €41.5mn from €39.8mn last year. This was largely due to exports, as it resumed sales of refined products to Libya, whose market was closed last year because of the country’s civil war. Total exports rose by 31% to €1.1mn, accounting for more than half of the company’s overall sales volume.
  • Banks: The four Greek banks received €18bn as part of the last international bailout. The funds will be divided between NBG (€7.43bn), Alpha Bank (€1.9bn), Eurobank (€3.97bn) and Piraeus Bank (€4.7bn).
  • Cypriot Companies: The Cypriot government tabled in the parliament a bill about its prospective entry to the European support mechanism. The bill is to be examined first by the parliament’s Financial Committee.
  • Ellaktor: According to press reports, Parnitha Casino suspended its operations on May 25 after 1.150 workers went on strike.

Technical

  • FTSE 20 June future: Support levels: 180-172-166. Resistance levels: 196-202-210.

Financial Morning News 28/05/2012

GREEK FINANCIAL MARKET

The General Index in Athens Stock Exchange (ASE) closed in a 22-year low at 485.18 posting losses of 3.45% in a turnover of €32.94mn.

The spokesman of German Finance Minister Wolfgang Schaeuble said that delaying the payout of the next tranche of the bailout package to Greece by a few weeks would not be a problem, as there is no acute financing need of an external kind until after the end of the first half year.

According to press reports, Greek budget revenue in the first few weeks of May has dropped nearly 20% from last year’s level due to the recession. It is likely that the government will use €3bn from HFSF to cover its obligations, especially for July.

The head of IIF Mr. Charles Dallara warned that if Greece leaves the euro zone, the world economy would suffer badly and he added that Greek Euro exit would cost more than €1trln and EU and IMF needs to give Greece more support, should lend Greece another €10bln.

The ECB Governing Council member Mr. Panicos Demetriades said that he does not rule out that Cyprus may resort to a bailout and he added that whatever may happen, will occur for the good of the economy and the banking system.

Corporate Releases

  • 05/28: Terna Energy Ex-Div €0.0671/share
  • 05/29: Cyprus Popular Bank, ELPE, Fourlis, PPC Q1’12 results, Frigoglass AGM
  • 05/30: NBG, Alpha Bank, Eurobank, Piraeus Bank, FF Group, MOH, Terna Energy Q1’12 results

Corporate Impacts

  • Banks: S&P’s raised the issue rating on untendered Greek bonds to ‘CCC’ from ‘D’.

Technical

  • FTSE 20 June future: Support levels: 172-166-160. Resistance levels: 186-194-202.
  • General Index: Support levels: 480-475-460. Resistance levels: 520-553-610.

Financial Morning News 25/05/2012

GREEK FINANCIAL MARKET

The General Index in Athens Stock Exchange (ASE) closed in a 22-year low at 502.52 posting heavy losses of 4.53%, in a turnover of €36.70mn.

The ECB Governing Council member Mr. Ewald Nowotny said that no-one knows the consequences of a Greek exit From Euro-Zone, as it would cause massive disturbances.

According to the Center for Strategic Studies in Moscow, Vladimir Putin faces the risk of Russia’s political stability being shaken if Greece leaves the euro area, triggering a global crisis and sinking the price of oil (Bloomberg).

The Finance Ministry is considering using the funds that the Hellenic Financial Stability Facility has at its disposal to secure some desperately needed cash for the state for as long as possible.

The ND president Mr. Antonis Samaras said that a potential exit of Greece from the euro is suicide.

The Italy’s Deputy Economy Minister Mr. Vittorio Grilli said that Italy must prepare itself for the possibility of Greece leaving the euro zone, though it aims to avoid that happening.

The Professor Nouriel Roubini said that Greece will probably become insolvent and leave the euro this year or next.

Corporate Impacts

    • Banks: a) The BoG governor Mr. George Provopoulos said that banks will receive a capital boost of €18bn either today or Monday to cover losses stemming from the recent debt restructuring.

Technical

      • FTSE 20 June future: Support levels: 178-172-166Resistance levels: 190-198-207.

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