By Nicolas Bornozis
The Greek stock market rose four days out of five this week, with the ASE gaining 5.36% closing at 2175.19. Daily average turnover value was formed at €176.1 million. The FTSE/ASE 20 Index closed higher 4.53% than last week, at 1086.74. The FTSE/ASE 40 Index also rose 8.40% ending the week at 238.35. The FTSE/ASE 80 Index rose 7.14%, closing at 665.12. The FTSE/ASE 140 fell 5.46% to 2556.35. In the very positive climate this week, the two sectors that had the most gains were Insurance and Publishing and Printing. None of the sectors lost ground this week with almost all gaining more than 5%.
The Bank of Greece reported this week that the credit expansion climbed 4.8% in May 2003 from 4% in April. The Bank also reported that in May, credit to private sector grew 18.6% vs. 19.2% a month ago. Mortgage loans grew 30.8% in May from 31% in April. The Finance Minister also announced on Monday the government would sell up to 20.3 % of the state-run Athens Water and Sewage Company to a strategic investor.
The 2004 Greek fiscal budget which is scheduled to be discussed in the Greek Parliament in October, encompasses a 5.5% y-o-y growth in revenues (vs. 5.1% for the current year), spending to rise by 6.2%, while the nominal GDP to rise by 7.5% y-o-y. Last but not least, the deficit is expected to reach 0.9% of GDP vs. 1.2-1.5% estimated for 2003. On Thursday, the National Statistics Service reported that the June 2003 wholesale price index increased 3.1% from 2.4% in May 2003 and 0.3% in June 2002. On a month-on-month basis, wholesale prices fell 0.1%, bringing the 12-month average wholesale inflation rate ending in June to 1.9%.
National Bank of Greece
The Greek Minister of Finance, Nikos Christodoulakis, in cooperation with National Bank’s management is screening international institutional investors and investment banks in order to sell a National Bank stake of up to 21%. Assuming that Greek national elections are expected to take place in Spring 2004, reports state that the sale of National Bank’s shares should be completed by December 2004. The Finance Ministry plans to conclude the privatization process of the Greek banking sector by the end of the year. The plan includes the sale of the state’s 21% stake in National Bank, 9% of Emporiki Bank and finally to resolve the issues of the Greek Postal Savings Bank and General Bank.
A government source told Reuters that the government would probably decide on the possible sale of additional National Bank shares to domestic and foreign institutional investors in October. The sale is pending on market conditions and any decision will be made in cooperation with the bank’s management.
Current Fitch ratings for the National Bank are as follows: Long Term A-, Short Term F2, Individual C, and Support 2. The Long Term Outlook remains stable. According to Fitch the ratings reflect National Bank’s dominant position in the Greek financial markets, its large and stable deposit base, and good liquidity. They also take account improved core earnings and improving cost efficiency. Fitch also stressed the need for National Bank to improve internal capital generation to support future growth.
The Finance Minister is examining the possibility of selling 9% of Commercial Bank to a strategic investor (other than Credit Agricole) if Credit Agricole shows no interest in increasing its participation in the bank.
Imako Media Group
The Group announced that the Ministry of Development approved the merger of Imako Media Net Group with the company ‘Publishing & Communication’.
In the context of the expansion of its activities in the Balkans, Druckfarben announced that it acquired companies that activate in the sector of flexible packaging and graphic arts. The companies that are being acquired are the Bulgarian Michael Huber Bulgaria Eood and the Romanian company DF COM Romania SRL.
A Vivendi company source stated yesterday that a subsidiary of the company is interested in submitting a bid to acquire a stake in EYDAP as they are already cooperating in Eastern Europe. The Ministry of Finance officially announced on Monday that procedures will start for the selection of strategic investors that will be offered a 20.3% stake in EYDAP (a 10.3% stake will be offered by the Greek State and 10% by Agricultural Bank of Greece) aiming to boost the company’s construction and water management activities in Greece and abroad. The strategic investor will be a water company or a firm that will offer significant synergies to EYDAP in management, investment, and distribution of water.
Lan-net and Lantec
The Boards of Directors of Lan-net and Lantec Communications approved the merger of the two companies. The merger of the companies is said to offer significant economies of scale, whereas it will create a company with strong capital structure, being able to offer integrated telecommunications service & solutions, which will enable the company to participate in large projects of the public sector and the Support Frame.
Intracom signed a contract with ICE, the State controlled telecom operator of Costa Rica for the supply of ISDN network terminals for USD 2m. This is a further indication of the company’s continuing penetration in the Central America region as well as the broadening of its portfolio of customers.