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Daily Note
AVG Research
06 February 2015
Athens General
Market Turnover (EURm)
Market Cap (EURbn)
Market Cap / GDP*
daily
Y-t-d
819.5
%
-3.37%
%
-0.81%
151.83
-26.6%
49.19
26.8%
*2014
Headlines
close
Athens General Index
Macroeconomic News
900
880
860
The first meeting between the new Greek MoF Yanis Varoufakis and his German counterpart Wolfgang
Schaeuble yielded no concrete results - Schaeuble insisted that Greece has to negotiate with the troika in order
to make any adjustments to the program, while Varoufakis asked for time so that the Greek side can present
its own program. Varoufakis suggested that the Greek side agrees with 60%-70% of the reforms under the
current bailout and pledged to present to the next Eurogroup a roadmap that will show how Greece could
transition from its current bailout to a new agreement - According to press reports an extraordinary Eurogroup
meeting will be held on February 11, one day ahead of the EU summit – PM Alexis Tsipras talking to party
members stated that Greece will no longer take "orders" from other countries – The new government will
present it agenda on Sunday, with the vote of confidence in Parliament to take place on Tuesday - According to
IMF spokesperson the new Greek government has not formally approached IMF to table its proposals.
Additional Headlines
The European Commission (EC) warned in its winter forecasts that uncertainty regarding the policies that the
Syriza led government will follow has taken a toll on confidence and could slow Greece’s recovery. The EC
proceeded to a downward revision on 2015 GDP from 2.9% to 2.5%, despite the fact that the economy grew by
1% last year (versus an estimate for 0.6%). The EC forecasts are based on the assumption that Athens will meet
the pledges of the previous government as per the existing bailout program. For 1Q:15, the EC expects
uncertainty to be reflected in economic activity, but for 2015 as a whole it anticipates stronger private
consumption, an increase in exports and a rise in investments, provided that “the political environment
stabilizes”, while it expects the primary budget surplus last year to stand at 1.7% of GDP, climbing to 4.8% in
2015 (versus a previous estimate of 4.1% of GDP). However, the EC in its report stresses that this will require
new measures in addition to what the budget has provided for, highlighting that risks to the achievement of
fiscal targets derive from the temporary reduction in tax revenues.
Reportedly (Kathimerini), Greek PM Tsipras and Russian President Putin agreed yesterday to boost bilateral
ties in a telephone conversation during which the latter invited the new Greek premier to an event in Moscow
in May to mark the victory over Nazism. The two men agreed to boost cooperation in the economy and energy,
tourism, culture and transport sectors. Sources rebuffed rumors about financial support for Greece from
Russia, noting that the government was looking toward its EU partners for support. The two men also
discussed the possible creation of a pipeline to carry natural gas from Russia to Europe via Turkey and Greece.
Bank of Greece Governor Yannis Stournaras assured yesterday that Greek banks are perfectly safe and there is
no problem with their cash flow in the wake of the ECB’s decision to cease accepting Greek bonds as collateral
for the supply of liquidity as of February 11. Yannis Stournaras stated that yesterday was a quiet day for
deposits and stressed that Frankfurt’s decision will be revoked once an agreement is reached with the new
government. Note that the ECB yesterday approved the supply of EUR 60bn in liquidity from the Bank of
Greece through the emergency liquidity assistance (ELA) system.
Further to received notification dated 4 February, 2015, Piraeus Bank announced that Capital Group
Companies Inc as of February 3, 2015 owns indirectly, through funds managed by it, 198,747,454 registered
voting shares, corresponding to 9.8496% of Piraeus Bank total voting rights excluding of the HFSF stake.
Participation of foreign investors in the total market capitalization reached 61.1% compared to 61.5% at the
end of the previous month, marking a decrease of 0.6%. In the event that the participation of HFSF
capitalization was included (EUR 7,299.80m or 19.1%), the participation of foreign investors would amount to
49.5% compared to 45.9% that was recorded at the end of previous month, making an increase of 7.8%.
Foreign investors in January 2015 made 71.1% of total turnover.
Titan Cement announced that it acquired through its subsidiary Alvacim Ltd an additional 20% stake in Antea
Cement (Titan subsidiary in Albania). As a result of the acquisition, Titan Group now holds 80% of ANTEA’s
share capital, whereas the remaining 20% is held by the International Finance Corporation (IFC). This is
expected to provide a marginal improvement in Titan’s profitability.
According to daily Kathimerini, ENEL will not participate in the tender for hydrocarbon exploration of three onshore fields in Western Greece that is due today. ENEL had expressed its interest and had joined forces with
Hellenic Petroleum for the tender. According to the press report, Hellenic Petroleum will submit a bid on its
own, while Energean is expected to be the second contestant. Recall that three other oil majors (Repsol, Total,
Shell) had also expressed their interest but have forfeited due to declining oil prices.
840
820
800
780
760
740
720
700
05 Jan
12 Jan
19 Jan
26 Jan
02 Feb
ASE Indices & Sectors
FTSE - 20
FTSE - 40
FTSE - 140
ASE - Banks
ASE - Telecoms
ASE - Industrial
ASE - Construction
close
daily %
Y-t-d %
246.4
838.5
595.7
741.0
2243.3
2166.7
2383.3
-4.5%
-2.7%
-4.4%
-10.0%
-6.3%
-1.3%
-0.2%
-7.0%
8.5%
-6.4%
670.5%
-10.4%
10.9%
9.1%
FTSE ASE 20 Ratios*
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Sales (x)
Dividend yield (%)
2013f
2014f
17.8
1.0
7.4
1.0
1.6%
13.5
1.0
6.1
0.9
2.2%
12-14f
CAGR
-24.39%
-5.00%
-17.22%
-9.53%
38.40%
*consensus FactSet
FTSE ASE movers (last trading day)
TOP
Titan Cement Co. SA
Jumbo S.A.
Bank of Cyprus Public Co.
Ltd.
BOTTOM
Piraeus Bank S.A.
National Bank of Greece
EurobankS.A.
Ergasias SA
2.0%
0.6%
0.5%
-15.0%
-12.3%
-9.7%
Foreign Indices / Rates / FX
DJ Industrial Average
Nasdaq Composite
S&P 500
Euro STOXX
FTSE 100
CAC40
DAX
Austria ATX
Russia RTS
Turkey ISE 100
10 - Year Yield (DE)
USD / EUR
close
daily %
Y-t-d %
17884.
9
4765.1
1.2%
1.0%
1.0%
0.0%
0.1%
0.1%
-0.1%
0.0%
4.4%
-0.1%
0.3%
0.6%
0.2%
9.0%
4.6%
10.1%
11.2%
4.3%
1.7%
0.1%
1.2%
0.1%
33.1%
-5.5%
2062.5
348.3
6865.9
4703.3
10905.
4
2253.4
804.5
85789.
3
3.0%
1.14
Please continue overleaf….
Axia Ventures Group - 4 Vas. Sofias Ave., 10674 Athens Greece, Tel: +30 210 7414400, Fax: +30 210 7414449, Web: www.axiavg.com
Please refer to the last page for disclosures and analyst certification
Daily Note
Greek Economy – Negotiations with the EU
Fact: The first meeting between the new Greek MoF Yanis Varoufakis and his German counterpart Wolfgang Schaeuble yielded no concrete
results - Schaeuble insisted that Greece has to negotiate with the troika in order to make any adjustments to the program, while Varoufakis
asked for time so that the Greek side can present its own program. Varoufakis suggested that the Greek side agrees with 60%-70% of the
reforms under the current bailout and pledged to present to the next Eurogroup a roadmap that will show how Greece could transition from its
current bailout to a new agreement - According to press reports an extraordinary Eurogroup meeting will be held on February 11, one day ahead
of the EU summit – PM Alexis Tsipras talking to party members stated that Greece will no longer take "orders" from other countries – The new
government will present it agenda on Sunday, with the vote of confidence in Parliament to take place on Tuesday - According to IMF
spokesperson Gerry Rice the new Greek government has not formally approached IMF to table its proposals.
Assessment: During the joint press conference after the meeting Schaeuble noted that Greece's financial woes were the result of domestic
problems and that Europe was not at fault, but that Germany would do all in its power to help establish a sustainable, competitive and collective
future. The German MoF noted that there has been significant progress with regard to the implementation of the current program and that
there are commitments from the Greek side and these commitments need confirmation. Still on the possibility of the existing program being
altered, he stressed that Greece needs to reach an agreement with the European Commission (EC), European Central Bank (ECB) and the
International Monetary Fund (IMF). According to Schaeuble this agreement should focus on how Greece could regain access to the markets.
Varoufakis said that the meeting was meant to set a framework for the discussions that will aim to lead to an approach that will put an end to
Greece’s situation. To this end he pledged on Thursday to present to the next Eurogroup (we understand at the next ordinary Eurogroup meeting
on February 16) a roadmap that will show how Greece could transition from its current bailout to a new agreement, which he believes can be
agreed by the end of May 2015. Therefore he asked for more time. This new program he said will be presented “very soon.” We highlight
Varoufakis comment that the Greek government agrees with the 60-70% of the reforms which are included in the current program. Still he noted
that the current program has a wrong approach. Finally, Varoufakis asked from Schaeuble to assist in fighting tax evasion, tax avoidance and
dealing with issues related to transfer pricing.
Varoufakis – Schaeuble meeting was the first official interaction between the new Greek government and the German government. This meeting
came ahead of the important EU Summit on February 12, when Alexis Tsipras will meet Chancellor Merkel and other EU leaders.
In between, according to press, Eurogroup also plans to hold an extraordinary meeting (February 11) to discuss the positions of the Greek
government. Note that an ordinary Eurogroup meeting is scheduled on February 16, while on February 28 the extension period of the Greek
program expires.
In respect of the Greek program Kathimerini quotes sources saying that the ECB president Mario Draghi noted yesterday that the security of
Greece against the markets is ensured because (and only until) Greece is under a program with conditionalities. This program must be
supervised also by the IMF, while ECB will stop being part of the troika given the adjusted framework following the QE.
Addressing the first meeting of Syriza’s parliamentary group, Alexis Tsipras repeated his pledge that his government will ‘end troika’ and stressed
that Greece will present its own road map for an exit from the crisis. Still he noted that his government is moving within a European framework,
respects the rules and asks of everyone to do the same, adding that deliberation has begun and both Europe and Greece need time. He stressed
that Greece was not a threat to Europe. “On the contrary, the new government comes to restore balance in Europe” he said.
Tsipras also repeated that the government would do everything to change things and not betray the voters’ trust.
According to the PM, the government guarantees an end to sacrifices, especially pointless sacrifices without results, as well as people’s savings
and a European course for the country. On the other hand he promised “lightning action” to strike down clientelism and corruption through
sweeping changes.
The government rescheduled the time of the presentation of its agenda to the Parliament from this Saturday to Sunday. According to
Kathimerini, citing sources, the intention of the government by announcing its agenda is to reassure international partners of its intentions
following comments during the first days of Syriza coming into power vis-a-vis a loose fiscal policy. Reportedly, the agenda will have a 4-year
horizon and as a first priority will deal with the “humanitarian crisis” in the country. Most likely the government will also announce measures
that address issues like arrears towards the State and NPLs as well adjustments on the labor law.
Following the presentation of the agenda, the government will ask (and receive since it controls 162 seats in the 300 seats Parliament) a vote of
confidence from the Parliament on Tuesday.
According to the IMF’s spokesperson, Gerry Rice, the new Greek government has not formally approached the IMF to table its proposals and
“therefore, we can neither assess the state of the economy nor discuss further steps.”
Name: Constantinos Zouzoulas
AVG Research
e-mail: [email protected]
Phone number: +30 210 7414460
Page 2
Daily Note
Corporate and Macro Calendar
Macros - February 2015
Event
For the month of
Release date
Commercial Transactions (prov. data)
Dec-14
9/2/2015
Industrial Production Index
Dec-14
9/2/2015
Building Activity
Nov-14
12/2/2015
Labour Force Survey (monthly results)
Nov-14
12/2/2015
Import Price Index in Industry
Dec-14
13/2/2015
Quarterly National Accounts (estimates)
Q4:14
13/2/2015
HICP
Jan-15
17/2/2015
CPI
Jan-15
17/2/2015
Turnover Index in Industry
Dec-14
19/2/2015
Producer Price Index in Industry
Jan-15
27/2/2015
Quarterly National Accounts (prov. data)
Q4:14
27/2/2015
Turnover Index in Retail Trade
Dec-14
27/2/2015
Company
Fact
Date
ALCO Hellas
EGM
13/2/2015
Trastor REIC
EGM
20/2/2015
Corporate
Earnings Announcements
AVG Research
Coca Cola HBC
FY:14
18/2/2015
Fourlis
FY:14
24/2/2015
Hellenic Petroleum (ELPE)
FY:14
26/2/2015
OTE
FY:14
26/2/2015
Titan Cement
FY:14
5/3/2015
Hellenic Exchanges
FY:14
16/3/2015
Mytilineos
FY:14
18/3/2015
Metka
FY:14
18/3/2015
Page 3
Daily Note
Disclosures
General information
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Content of the report
The persons in charge of the preparation of this daily report, the names of whom are disclosed below, certify that the views and
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Whilst all substantial sources of information for the research are indicated in this report, including, without limitation, bases of
valuation applied to any security or derivative security, such information has not been disclosed to the Subject Companies for their
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All information contained herein is subject to change at any time without notice. No member of Axia has an obligation to update,
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Persons responsible for this report: Constantinos Zouzoulas (analyst)
Key Definitions
AVG Research 12-month rating*
Buy
The stock to generate total return** of and above 10% within the next 12-months
The stock to generate total return* *between -10% and 10% within the next 12Neutral
months
Sell
The stock to generate total return* * of and below -10% within the next 12 months
Under Review
Stock’s target price or rating is subject to possible change
Applicable Laws / Regulation and AXIA Ventures Group Limited policies might
Restricted
restrict certain types of communication and investment recommendations
Not Rated
There is no rating for the company by AXIA Ventures Group Limited
* exceptions to the bands may be granted by the Investment Review Committee of Axia taking into account specific characteristics of
the Subject Company.
**total return: % price appreciation –percentage change in share price from current price to projected target price plus projected
dividend yield
AXIA Ventures Group Limited Rating Distribution as of today
Coverage Universe
Buy
Hold
Sell
Restricted
Not Rated
Under Review
Count
Percent
10
100%
Of which Investment
Banking Relationships
Count
Percent
5
50%
Daily Note
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