By Nicolas Bornozis
The Greek stocks closed lower again this week with the General index closing 1.86% down at 2001.50. Hellenic Telecommunications Organization’s (OTE) extended declines have been the main reason for the drop in the market. Greece’s biggest phone company shaved off almost a fifth of its market value after it announced that revenues dropped in its fixed-line business. The stock was also downgraded to “neutral” from “overweight” by the Greek brokerage firm, Kappa Securities, because the company is loosing business to mobile operators. The FTSE ASE 20 Index fell 16.82 points to 1009.13, while the FTSE ASE Midcap 40 index fell 3.08% to 210.47, and the FTSE ASE Midcap 80 lost 35 points, closing at 550.68
The current account balance showed a small surplus in July 2003, as had also been the case in July 2002. This mainly reflects a considerable increase in the transfers surplus, which more than offset the widening of the income account deficit. The trade and services balances remained virtually unchanged. With regard to the trade balance, both exports and imports did not change significantly over July 2002. The small rise in the services surplus mainly stemmed from an increase in net transport (notably sea transport) receipts. Net travel receipts fell slightly, as the decline in gross receipts was almost offset by the decrease in gross payments.
In July 2003, financial flows under direct investment were low. Under portfolio investment, a net outflow of euros 908 million was observed, mainly reflecting non-residents’ disinvestment in Greek government bonds and, to a lesser extent, residents’ net acquisition of foreign bonds and shares. Finally, as regards ‘other investment’, a net inflow of euros 1,132 million was recorded, mainly connected with a decrease in domestic credit institutions’ and institutional investors’ deposits and repo holdings abroad, as well as with an increase in non-residents’ deposits and repo holdings in Greece.
NATIONAL BANK OF GREECE
The National Bank of Greece entered into an agreement for the acquisition of a 81.6% stake in the share capital of Banca Romaneasca S.A. (BR) with Romanian American Enterprise Fund (RAEF), the major shareholder of the Romanian bank. National Bank’s initiative is expected to enhance significantly the leading presence of the NBG Group in the area of southeast Europe; at the same time, it will allow it to strategically position itself in the fast-growing Romanian market. NBG has already established in Romania a brokerage company, an insurance company and a full banking branch that will continue its operations to provide for the financial needs of the local market. BR is a medium-sized Romanian bank with a presence in all major cities throughout the country.
BANK OF CYPRUS
Bank of Cyprus Ltd has successfully launched a 200 million Bond issue denominated in euro. The Bonds are step-up as subordinated floating rate notes and mature in October 2013, but the Bank has the option to call them during or after October 2008. The Bonds bear a coupon of 100bps above the three-month Euribor and were issued at a re-offer price of 99.766. If the Bonds are not called in October 2008 the coupon steps up by an additional 120bps. The Bonds will be listed on the Luxembourg Stock Exchange.
The proceeds of the issue will strengthen the Bank’s capital base. JP Morgan and Merrill Lynch International acted as Joint Lead Managers and Book-runners of the issue and the syndicate group comprised.
VODAFONE – PANAFON S.A.
Vodafone-Panafon announces today further reductions in termination charges for phone calls originating from fixed networks and terminating on the Vodafone – Panafon network, with effect from 5 October 2003. This price reduction is the third reduction in fixed to mobile termination charges that Vodafone-Panafon has initiated during the last eighteen months. Fixed to mobile termination charges will be reduced from euro 0.190 per minute to euro 0.175 per minute. In parallel, the minimum charging period will be reduced from 42 seconds to 33 seconds. The new price reductions provide escalating benefits that begin at 7.9% and increase to 27.6% for phone calls up to 33 seconds. Total price reductions during the year 2003 reach up to 54.2%, reflecting the considerable value offered to Vodafone customers.
COSMOTE MOBILE COMMUNICATIONS S.A.
Cosmote announced this week new interconnection rates for calls originating from PSTN networks and terminating on COSMOTE’s network (‘fixed to mobile’). According to the new rates, that will be effective as of 10/05/2003, COSMOTE’s interconnection charges for fixed to mobile calls will decrease to 17 eurocents/min with a 33” minimum call duration charge. The aforementioned are not expected to have any material impact on Cosmote’s financial performance.
Intracom signed a new agreement, budgeted at over EUR 3 million, with Dancom Pakistan (PVT) Ltd for the supply and installation of a wireless broadband services provision system based on the Intracom developed I-Brain product. The system will be installed in large cities of Pakistan. Dancom Pakistan is the leading public telephony services provider in Pakistan, also active in Internet and data services provision. Via the I-Brain system, Dancom Pakistan will proceed in the provision of voice transmission and high-speed data services (Fast Internet, VPNs, VoIP) to companies/ corporations and households
On Wednesday, the 24th of September 2003, the Greek Ministry of Public Works opened the sealed bids in two tenders, one for the construction of sections of the new auto route linking Athens with Thessaloniki and one for the construction of a section of the Ionian highway detouring the city of Arta. In both tenders Michaniki SA was the lowest bidder.
For the first project, Michaniki bid 72.7million euro, corresponding to a 14.2 percent discount, and for the second project the bid was at 32.7 million euro, corresponding to a 11.6 percent discount.