Market Comment – ΒΕΤΑ SECURITIES – In the Spotlight 

¢    Market Comment – ΒΕΤΑ SECURITIES

Despite the slight drop of the banks index on Wednesday, the benchmark and the majority of stocks on the Greek bourse continued their rise, led by mid-caps, albeit at a slower pace and tighter range than in previous days. This has taken the main index to another five-year record high after the seventh straight day of gains. General index ended at 942.92 points, adding 0.07% to Tuesday’s 942.27 points. The large-cap FTSE 25 index expanded 0.06% to 2,354.21 points and the mid-cap index improved 1.25%. The banks index eased 0.29%, with Eurobank falling 1.04%, Piraeus sliding 0.60% and Alpha slipping 0.16%, while National improved 0.69%. Ellaktor outperformed, growing 3.08%, and OPAP earned 2.08%, as ADMIE Holdings dropped 1.21% and Aegean Air contracted 1.11%. In total 70 stocks headed higher, 44 endured losses and 26 remained unchanged. Turnover amounted to €77.8m, down from Tuesday’s €120.4m.

Investors on a waiting stance ahead of tomorrow’s Fitch rating, selective interest to keep index in touch with highs.  

¢    In the Spotlight

Greece: Greek lawmakers elected Katerina Sakellaropoulou as the country’s next president. She will succeed Prokopis Pavlopoulos, whose five-year term expires in March. The former Council of State head’s nomination was backed by 261 MPs in the 300-seat parliament, as New Democracy, Syriza and the Movement for Change voted in favor of her. 

Greece/Economy: The government’s economic team on Wednesday met with the heads of the institutions’ missions in Greece, in the framework of the 5th enhanced surveillance report on the Greek economy. According to a finance ministry official, the Greek side presented five key priorities:

§  Using the profits from Greek bonds (ANFAs and SMPs) for mature investments

§  Making use of excess revenue from exceeding primary surplus targets to reduce solidarity and property taxes

§  Lowering primary surplus targets

§  Having the option to transfer any “excess” primary surplus so that there is a corresponding reduction in the following year

§  Excluding from fiscal figures a sum (of roughly 200 million euros) due to increased migration flows.

According to a finance ministry official, these issues could be entirely separate or interrelated with one another. He said the economic team presented the institutions with specific proposals on three of these (ANFAs and SMPs, transferring excess surpluses and migration).

The same official revealed that a comprehensive bill to counteract tax evasion and smuggling will be unveiled next month, adding that the progress in reducing public-sector arrears to the private sector was satisfactory. 

Greece/Economy:  The Public Debt Management Agency is ready for Greece’s first market foray of 2020, with the issue of a 15-year bond, which is seen raising €2-€2.5bn. The PDMA has completed its contacts with investment firms and bookrunners, weighed market conditions and reached a decision along with the Finance Ministry. The first and most likely target is for this foray to take place early next week, if conditions allow for it. Therefore, bank sources say that on Monday the PDMA will likely ask the bookrunners to proceed with the issue procedures, with the book opening on Tuesday, January 28. There is also the alternative target date of February 4, given that the verdict of Fitch Ratings, expected late on Friday, remains unknown for now. 

NBG: Varde Partners has reportedly joined the race for the sale of an at least 80% stake in NBG’ Ethniki Insurance. Press reports said that Varde is among the candidates that have submitted a non-binding bid and has been qualified for the second phase of the tender along with China’s Fosun and CVC Capital Partners. Varde holds a 32%b stake in Lamda Malls and a 56.6% stake in Trastor REIC. The next phase of the process, which includes the submission of binding offers is expected by the end of January 2020, according to press reports. Recall that NBG had put Ethniki Insurance up for sale as part of an EU-approved restructuring plan to focus on core banking operations, back in 2017. Previous attempts to sell the insurance business to U.S. and Dutch investors fell through in March 2018, while NBG also rejected a renewed bid by Chinese Gongbao in late 2018, as the bid was considered low. 

Mytilineos: The group held a presentation to analysts at its premises yesterday. Cash position currently stands at €750mn but decision on the utilization of this cash is not expected before end March 2020 when bauxite provision discussion finalizes.  For the metallurgy sector Mr Mytilineos said it expects a repetition of FY’9’s performance while guidance for 2020 will be most likely provided at the company’s AGM. PPC contract is expected to be renewed as high voltage provision from lignite fired plants is compensated for CO2 emission costs according to EU regulation. Mytilineos expects Libya project, in which a downpayment of $9mn has been collected, to start within 2020. 

PPA: Leading cruise operator MSC Cruises announced on Wednesday in Athens a first for the Swiss-based operator: the launch of a new route across the Aegean and the East Mediterranean that will have Piraeus as its home port. MSC, which has seen the number of its passengers visiting Greece soar 41% over the last three years, has decided the time has come for Piraeus to serve not just as a port of call but also as the home port of a route starting in May 2021. It will be a seven-day cruise on the MSC Lirica vessel that will also visit Mykonos, Haifa, Limassol, Rhodes and Kusadasi before returning to Piraeus, the company’s executive director Angelo Capurro said. “With Venice having the well-known restrictions, we sought alternative solutions, and Piraeus appears ideal. We are starting with a smaller ship, to test the waters,” he stated. 

ADMIE: Independent Power Transmission Operator (ADMIE) announced the signing of a 15-year contract to lease out its fiber-optics grid to telecommunications supplier Wind Hellas, in its first step toward becoming active in the wholesale telecommunications market. The contract provides for the leasing of fiber-optics infrastructure in sections of the ADMIE network in mainland Greece adding up to 1,600 kilometers. This will be conducted through ADMIE’s subsidiary “Grid Network,” set up in January 2019 to utilize the fiber-optics network of the power grid company that has a total length of 2,700 kilometers, with the potential for a total length of 12,000 km across the country. 

Cenergy: Cenergy Holdings on Wednesday announced that Greece’s Independent Power Transmission Operator (ADMIE) commissioned Fulgor, subsidiary of Cenergy’s Hellenic Cables, to supply and install underwater and ground cables for the electrical interconnection of Skiathos island with the national power grid.  Hellenic Cables/Fulgor, which specializes in submarine cable interconnections, will design and produce nearly 30 kilometers of a 150 kV submarine cable system, its underwater installation and protection and its connection to the 150 KV national transmission system in Mantoudi, Evia. The project is budgeted at 43 million euros, expected to begin in January 2020 and scheduled for completion within 20 months. 

Intrakat: According to press, Vinci has teamed up with Intrakat in a tender for street lighting launched a few days ago by regional authorities in Epirus, northwestern Greece, with a budget of more than 8 million euros.  

PPC: Today before the opening 366,000 (CR) shares of the company will be auctioned. The start price for the auction of shares is set at minus five percent (-5% €3.9840) of the closing price of the share on January 22, 2020. 

OTE: The company bought 48,500 own shares at €13.7782/share for a total consideration of €668.241K. Total treasury stock now amounts to 1.979% of share capital (9,498,943 shares). Reportedly the new collective agreement between management and Labor union has been approved from Labour’s union BoD yesterday. 

Ellaktor: According to press reports the group will reopen the issue of €600m, Eurobond today for additional €50m with the same coupon.