By Nicolas Bornozis
The Greek stocks declined this week, by 1.44% closing at 2163.47 points. The announcement of Deutsche Bank to sell its 9.3 % stake in EFG Eurobank negatively effected in the market. The FTSE/ASE 20 Index fell by 1.13% closing at 1088.74 while the FTSE/ASE 40 lost 1.38%, ending the week at 234.87 points. The FTSEASE small cap 80 Index fell this week by 1.97% closing on Friday at 610.40 points.
The final draft of the 2004 budget, will be submitted to the parliament for approval on November 18th. In an effort to assist next year’s budget, the Minister of National Economy & Finance met with the management of public utilities listed companies to discuss their economic policy for the forthcoming year. The goal is for companies to increase their performance, not by increasing prices but through usage of modern production systems. In this way the Minister is looking for support in his effort to reduce inflation and limit public sector expenses.
OECD estimates are closer to that made by the government in comparison with the estimates of the EC. OECD estimates Greece’s general government budget deficit at 1,7% of GDP in 2003 and 1,5% of GDP in 2004, where EC estimates 2,4% for 2004 and the government 1,2%. Unemployment rate estimate is at 8,9% for 2004 compared to 9,2 % by EC estimate. OECD comments that Greece has to make progress on structural reforms, referring to the labor market and pension reforms.
On Monday 10th of November, the government unveiled the long awaited tax reforms, presenting new ways of tax inspection on companies, as well as development and social policy tax incentives. The tax rate will be reduced from 35% to 25% on net profits, for the next ten years, for companies investing more than 30 ml Euros. Companies from 2009 and for five years will have the opportunity to form a tax-free reserve up to 35% of their undistributed profits.
In September 30, 2003 the State was guarantor for public utilities’ loans amounting up to 2,1 bn Euros and total loans of 9,7 bn Euros. By the end of 2003 the total loans that the Greek State acts as a guarantor are expected to reach 2,5 bn Euros. Some of the public utilities included are local railways (OSE), the Institution of Farmer’s Compensation (ELGA) and Athens City Public Transportation (OASA).
EFG EUROBANK ERGASIAS S.A.
Deutsche Bank intends to sell its entire 9.3 per cent stake totalling 29.2 million shares of EFG Eurobank through an accelerated bookbuilding that started on November 12th. This is in line with Deutsche Bank’s strategy of divesting from holdings in other listed companies. EFG as well completed the merger with subsidiary Investment Development Fund with an exchange ratio of 1 EFG share for 6.4 shares of the investment fund. Following the merger the shares of the Investment Development Fund cease to trade on ATHEX on the 12th of November.
COMMERCIAL BANK OF GREECE
Commercial Bank of Greece, announced its nine-month results for 2003, showing better results than expected, and this is mainly due to higher trading gains. The Group’s profit before tax and after minorities in the 9-months of 2003 amounted to EUR 83.7 million up by 15.2% compared to the 9-months of 2002. The improvement in net operating income, however, was higher; net operating income of the Group in the 9-months of 2003 increased by 31.7% and amounted to EUR 86.2 million. In the 3rd quarter of 2003 profits before tax and after minorities were EUR 27.5 million and were by 26.5% higher than in the 2nd quarter of 2003. The net operating income of the 3rd quarter of 2003 was EUR 29.1 million compared to EUR 23.0 million in the 2nd quarter of 2003 showing an increase of 26.3%. The return on average equity (ROAE) of the Group increased to around 9.0% from around 5% in the 9-months of 2002.
BANK OF CYPRUS
Acting in the context of the provisions of paragraph 9(b) of the Terms of Issue of the C£25.000.000 Bank of Cyprus Ltd Subordinated Floating Rate Loan Stock 2003/2008 (the Loan Stock), the Bank of Cyprus Ltd (the Bank) decided to exercise its option to call the Loan Stock in full. The Loan Stock will be redeemed on 19 December 2003 at its principal amount plus any accrued interest for the six months ended 18 June 2003 and for 19 December 2003. In accordance with paragraph 11(b) of the Terms of Issue of the Loan Stock, trading of the Loan Stock on the Cyprus Stock Exchange (CSE) will be suspended from 14 November 2003.
Lavipharm Group signed an agreement with Lierac, the French listed company that specializes in high technology dermocosmetic products, thus strengthening further its position in the area of innovative drug delivery systems. Under the terms of the agreement, Lavipharm’s Solid Gel Technology (in the form of a patch) is applied in Lierac’s new anti-wrinkle cosmetic product, namely Solupatch. This new product significantly reduces facial skin aging signs. Solupatch has already been launched in the dynamic dermocosmetics market of Korea while other countries will follow.