By Nicolas Bornozis
Greek stocks increased this week, by 0.90% closing at 2121.06 points. The positive news on the GDP of the states, even though they came with a delay to Greece, had a positive effect on the market. The FTSE/ASE 20 Index increased by 1.10% closing at 1063.61 while the FTSE/ASE 40 increased 1,5%, ending the week at 230.95 points. The FTSEASE small cap 80 Index increased slightly this week, 1.11% closing on Friday at 599.96 points.
Greece’s GDP growth rate is projected to increase above 4% in the 2003-2004 period based on the European Commission’s Autumn 2003 economic report. Investment spending is likely decrease after the completion of constructions projects related to the Olympics. General government deficit, as a percentage of GDP, will be at levels of 2.4% in 2004 from a 1.7 % in 2003. The increase in the general government deficit is a result arising from the increases in social measures and wage bills that are expected in 2004. Debt ratio estimate is 100.6% of GDP in 2003 with tendencies to fall to 95% of GDP in 2005, due to the contribution of real GDP growth.
Imports of good and services will rise and at the same time exports, and more specifically services exports, are expected to increase due to the Olympics with an effect of slightly improving the external transactions deficit. The Greek National Economy and Finance Minister Nikos Christodoulakis, commenting on the results of the report, stated that “the government maintained its 2004 budget deficit forecast of 1,2% of GDP, despite the European Commission’s forecast of a shortfall twice as big”. The 2004 budget, is due to be submitted to the Parliament on November 20th.
The Association of Industrial and Economic Research (IOVE) announced that the Greek economic sentiment index rose to 98.3 in September, from 98.1 in August. This improvement is a result mainly of the improvement in the construction sub-index and the retail trade sub-index but in a smaller percentage.
In other microeconomic news, the new development Law will take effect from January 1st 2004, which will provide tax incentives. A tax-free reserve equal to 50% of the net difference between 2003-2002 corporate profits may be recorded by companies for 2003, with a respective percentage of 35% for 2004. On a micro lever, Hellenic state is about to sell State Lotteries license for 300mn euros to cover part of the deficits in early 2004. The respective license will be for operating and managing State Lotteries for a five year period.
Alpha Bank S.A.
The shareholders of Alpha Bank have approved the merger with Alpha Investments through absorption of the former by the Bank. They approved as well the draft contract and the merger acts of the two companies. Alpha Investment shareholders on the General Meeting on October 14, 2003 have already approved the merger, and the respective approvals of the competent authorities will be obtained by the end of November 2003.
Coca Cola HBC
CCHBC hold an EGM on the 31st of October to approve the reduction of its share capital by 473.3 mn euros, and a return of an equal amount to its shareholders. This will be achieved through a reduction of nominal share value from 2.50 euros to 0.50 euros. This is another step of the company, after announcing in August 2003 a leverage re-capitalization scheme. The process is expected to be concluded by late November.
Hyatt Regency Hellas
Hyatt Regency has announced its decision to postpone its plans for offering a 19% stake in the Athens Resort Casino to its existing shareholders until the Casino of Parnitha and the Athens Resort Casino are listed on the AE. The decision was based on views of institutional investors that participating in the offering would be difficult as the Athens Resort Casino shares are not listed on ASE. Hyatt also decided to pay an interim dividend after the announcement of nine month results in November.
Delta Singular S.A.
Delta Singular S.A has announced today (10-31-2003) the financial results for the nine month period of 2003. Pre tax after and after minority rights profits for the period January – September 2003 amounted to Euro 7.4 million compared to Euro 12.4 million of last year’s corresponding period (-40%). These results are mainly attributed to loses of Euro 2.5 million in the Systems Integration Business Unit versus profits of Euro 2.5 million in 2002. On the other hand, the profits of the IT Outsourcing Services Business Unit increased to Euro 15.8 million from Euro 14.4 million in 2002, and the profits of the Software Products Business Unit increased to Euro 1.2 million from Euro 0.3 million in last year.
Emporiki Bank of Greece
Emporiki Bank is currently offering a new line of guaranteed initial capital investment products under the name Emporiki Value Plus. In particular, these are special forms of time deposits that guarantee 100% of the initial capital on maturity as well as the possibility of return higher than that of simple deposit products. This return depends on the course of the stock exchange indices connected to the investment.