In the Spotlight – Beta Securities
Greece/State Arrears: State’s total outstanding debts to third parties declined slightly m-o-m in October to €2.46bn from €2.5bn in the previous month, data from the Finance Ministry showed. State arrears dropped slightly €8mn to €1.63bn, while unpaid tax refunds dropped €46mn m-o-m to €828mn.
Greece/Trade Balance: Commercial transactions’ trade balance posted a deficit of €1.7bn in October, up 5%, y-o-y, the statistics office said. However, excluding the impact of oil products and ships, the commercial trade deficit expanded 0.6%. Imports fell 8% y-o-y, while excluding oil products and ships, imports were up 2%. Also, exports slipped 9% but after the impact of oil and ships, exports were up 3% y-o-y in October. In the January-October period, the trade balance showed a deficit of €18.5bn, up 6% y-o-y. Excluding oil products and ships, the deficit expanded 8%.
Greece/Economy – BOG report: Bank of Greece warned on Friday of a possible need for capital injection in banks, given the deferred tax credits at sector level exceeded 60% of CET1 capital in June 2019. “It should be pointed out that the high DTC share in the regulatory own funds of banks restricts their ability to accelerate the reduction of the NPL stock, as they are unwilling to use this portion of regulatory own funds to absorb losses,” BoG said in its Financial Stability Review.
- “In this context, any additional regulatory capital requirements resulting from the phasing in of IFRS 9, the 2020 stress test, and the introduction of the prudential backstop will act as further aggravating factors,” added. The central bank reiterated the need for rapid reduction of the existing NPL stock, saying that is a factor of “utmost importance.”
“The large legacy NPL stock, which impacts profitability, coupled with the low quality of regulatory own funds burden the operating environment of banks. NPL reduction has accelerated, but this pace is not enough to ensure a rapid de-escalation so that the Greek banking sector comes closer to the European average.”
Greece/Economy: The government’s new taxation bill was passed by a majority vote in parliament on Friday evening, with partial approval by SYRIZA on specific clauses. The bill will bring tax cuts totaling up to €1.2bn for businesses and households.
Greece/Economy – Residence Protection Scheme extension: Finance ministry on Friday tabled a late-night draft bill to extend, by four months, a legal protection framework for primary residences against creditors, mainly lien-holding banks. The framework will expire on April 30, 2020, if not renewed.
Banking Sector: Although Fitch Ratings has revised the sector outlook for western European Banks to negative, retains the positive outlook for the Greek banking sector, as it “reflects our expectation that the banks’ credit profiles, albeit still very weak, will further improve in 2020 as NPL reduction continues,” said.
- In its 2020 Outlook for Western European Banks, Fitch said the overall sector outlook for western European banks in 2020 is negative as revenue generation is likely to be pressured by the weak outlook for GDP growth and continued low interest rates. “We expect credit losses to increase from their cyclically low levels, and banks with weaker underwriting standards and greater reliance on net interest income could face significant earnings pressure.
However, many banks will be able to support earnings with further cost-cutting,” added. In other related news Hercules project regarding NPE reduction will be submitted and voted to Parliament on December 12-13. Hercules is expected to alleviate bank’s B/S’s by €31.5bn of NPE’s. Alpha Bank will transfer 12bn NPE’s, Eurobank €7.5bn, Bank of Piraeus €6bn and NBG €6bn.
OTE: Treasury stock stands at 1.766% of share capital (8,476,270 shares).
Coca Cola Hellenic: Following its announcement on 18 September 2019, Coca-Cola HBC AG is pleased to confirm the completion of the acquisition of Lurisia, a premium natural mineral water and adult sparkling beverages business in Italy. The acquisition was made in conjunction with The Coca-Cola Company, in line with previous similar acquisitions.
PPC: New 5-year business plan to be presented on December 16th.
NBG: The bank examines plan b ie ASE listing for its insurance subsidiary Ethniki Asfalistiki. Binding bids from initially interested parties namely Lone Star, CVC, I3CP, Centerbridge and Fosun expected by December 31st.
Lamda Development: Final decision on the eligibility of both 2 offers submitted by interested parties, namely Hard Rock and Mohegan, concerning the casino license operation in the Helliniko project expected today.
ELLAKTOR: New €600mn 2024 Eurobond coupon set at 6.375%. Total bids exceeded €1.2bn with 75% of the demand coming from foreign investors.
Mytilineos: The Mytilineos group’s Metallurgy Business Unit announced on Thursday it has joined the Aluminium Stewardship Initiative (ASI) as a Production & Transformation member. ASI is a global, multi-stakeholder, nonprofit standards setting and certification organization that has developed an independent certification program to ensure that the principles of sustainability, corporate social responsibility, governance and human rights are increasingly integrated into the production, use and recycling of aluminum.
GEK TERNA: The company bought 25K shares at an average price €6.86/share.
SARANTIS: Major shareholders K.Sarantis and G.Sarantis sold 75k and 100K shares at €8.39/share and €8.49/share respectively.
Trastor REIC: Company announced the acquisition of a retail outlet in Northern Athens area (Kifisia) of 100m2 for a total consideration of €1mn.
Frigoglass: The company announced the completion of the merger of its subsidiaries Frigoglass Industries Nigeria Limited and Frigoglass WestAfrica Limited. 9M’19 results will be released on December 12th prior to market opening. A conference call analyzing results will follow later in the afternoon (4pm Athens local time).
Petropoulos : Petropoulos S.A. announced the sale of real estate asset in Rentis area for €4.070m. Price is in line with property assessment report prepared by independent auditor. Note that the buyer (DELPA S.A) is a corporate entity in which major shareholders are Mr. Ioannis & Konstantinos Petropoulos
Plaisio: Reportedly Plaisio aims to open its 6th Hyperstore in 2020.