by Nicolas Bornozis, Capital Link,Inc, www.capitallinkgreece.com
Greek stocks decreased this week by 1.51% closing at 2322.39 points. The FTSE/ASE 20 Index decreased by 1.19% closing at 1248.76 while the FTSE/ASE 40 realized a decrease of 3.26%, ending the week at 1970.73 points. The FTSE/ASE small cap 80 Index decreased this week by 1.91% closing on Friday at 471.59 points.
Greece is to collect 750 million euro from the EU 3rd Community Support Framework in the next two months. Press reports indicate that Greece will receive 750 million euro and raise the total funds collected in 2004 to 1.5 billion euro. Reportedly the fiscal year 2004 target called for 4 billion euro something that now seems unattainable. The same press reports suggest that Greece will receive 3 billion euro from the 3rd Community Support Framework in 2004.
According to the Greek union of tourist enterprises, in the January-June 2004 period the number of visitors was significantly lower and the drop in arrivals is estimated to be as high as 8% compared to last year if the trend does not change in the coming months. We note that tourism accounts for c. 18% of Greek GDP, with employees in this specific sector totaling to c. 800,000. The drop in arrivals could be interpreted as a drop in jobs by c. 20,000 and a loss of EUR 800m, that is a drop of c. 0.7% of GDP growth (we estimate a 0.5% drop of GDP based on the 2004 fiscal budget as prepared by the previous government). Recently, there is increased talk over the issue.
Greek exports declined by 1.0% in May, imports rise by 0.5%. According to provisional data from the national statistic service, Greek imports- arrival reached 3.16 billion euro in May by 0.5%, while exports dispatches dropped by 1.0% to 0.97 billion. Greek exports to third countries plummeted by 17.2% to 0.42 billion euro, while exports to EU member countries advanced by 16% to 0.55 billion euro, a fact which is in part attributed to the enlargement of the EU with 10 new members as of May 1st. It is noted that the reported figures refer only to imports and exports of goods and not services.
Greek manufacturing output rise by 3.4% in May after advancing 2.5% in April. According to the national statistic service, Greek manufacturing output increased by 3.4% in May by robust production of chemical products and basic metals. In the first five months of 2004, manufacturing output was up by 1.3%. Industrial output increased by 0.3% in May.
Construction companies ask for amendments in the new legal framework regarding the procedures that will be followed for the assignment of the public projects, claiming that the new procedures are inefficient. Among others, construction companies ask for a reduction of the letter of guarantee level that will be required for the assignment of a project and require the existence of at least three banks for letters of guarantee that exceed EUR 4m. We note that the new legal framework that will replace the existing mathematical formula with a tender procedure, will require letters of guarantee for the 35% of the total cost of the project from 5% – 10% previously. The construction companies also require the increase of the percentage of a project that will be allowed to be assigned to subcontractors to 50%. We recall that based on the new legislation, the main contactor of the project will be able to assign only the 30% of the project to subcontractors from 70% previously. The construction companies also ask for amendments at the legal adjustments related to cancellations for the companies that delay the completion of the project.
Hatzioannou, the leading European group in the second skin manufacturing and value for money retailing, announced that its 100% UK subsidiary Virgin ware opened a new store in the UK. The store was in Telford on July 17, 2004. Virgin ware now operates in total 18 stores in England. The rights to the Virgin brand were bought in 2000 by Unique Commerce Ltd, which is a 100% owned subsidiary based in Manchester, UK. Unique Commerce owns the rights for commercial exploitation of the Virgin trademark globally and in perpetuity for products of inwear (men’s, ladies, children’s, underwear, swimwear, nightwear, hosiery and socks). Virgin ware currently operates 18 own stores in the UK, with a further 5 under negotiation. The rollout programme is for 25-30 stores in the UK by the end of 2004.
MALTCO LOTTERIES LTD, INTRALOT’s subsidiary in Malta, which has the exclusive license for the operation of all lottery games in the country, has successfully launched its activities. The first week of operation of the new on-line system commenced with the following games: Super 5, LOTTO, and Instant Lottery Tickets, while Sports Betting and KINO will be introduced in the near future. The system consists of state of the art CORONIS terminals, which are connected through a high-speed telecommunication network ADSL with the central system and runs on the LOTOS software platform. LOTOS supports the operation of a dual central system (main and back-up) that is located in different places in the country, ensuring the continuous operation of the games. NTRALOT holds a 73% stake in MALTCO LOTTERIES LTD, while local entrepreneurs possess the remaining 27%. Currently, MALTCO employs 50 people (95% Maltese) and the total investment program is expected to reach euros 30 million upon its completion. he privatisation project of Malta’s national lottery was assigned to MALTCO LOTTERIS, following an international tender, and constitutes a privatisation model that is followed by other countries as well. The duration of the contract is 8 years with a renewal option. The introduction of new technology, INTRALOT?s know-how and the operation of new games are expected to contribute to the shrinking of the illegal market and double the sales of the legal games in the country.
INFORM P.LYKOS S.A.
Inform P. Lykos S.A. was assigned the project of the Printing and Fulfillment of the insurance stamps for the Social Insurance Institute (IKA). IKA is the largest Social Security Organisation in Greece. It covers 5,530,000 workers and employees and provides 830,000 pensioners with retirement pension. In the national tender that took place, where other companies such as GREKIS and DELTA SINGULAR participated, Inform Lykos obtained the highest score. The project’s budget is 1.168.000 euro. The contract will last 12 months, and it is going to start in July 2004. According to Mr. Fournogerakis, Public Sector Sales Director, “the main requirement for the implementation of the project is the combination of high quality, reliability and speed of the following departments: Printing, Application of Security Characteristics, Overprinting of Variable Data, Categorization, Packaging and Distribution. Inform Lykos is a leading company in the above sectors, and provides all the guarantees for the implementation of such complex projects”.