Market Comment - In the Spotlight

Manos Chatzidakis	9:42 π.μ. (Πριν από 10 λεπτά)

Market Comment

The impressive rise of the General Index since December 31 came to an end yesterday as investors opted to cash in on their recent gains, which had pushed the market’s benchmark up 11.95 percent. Turnover amounted to €108.2 million, down from last Friday’s €167.5 million indicating a rather moderate correction. The retreat of main foreign market indices may negatively influence domestic bourse and along with the significant year gains General Index may extend yesterday’s correction.

In the Spotlight

Greece/Privatizations: According press articles the sale of the Piraeus Port Authority is set to begin next week, with the government and state privatization fund TAIPED aiming to sell a 67 percent stake in the country’s biggest port. The process will start as soon as the privatization plan has been discussed in Parliament. Next week TAIPED will inform deputies about the text of the invitation for expressions of interest. The fund prefers the model of the direct sale of the OLP shares, with the European Commission said to be in agreement following the forwarding of the plan to Brussels.

Greece/PDMA:  Greece will auction today 1.25 billion euros of three-month T-bills to refinance a maturing issue. Previous auction was settled at 3.90% interest coupon.

Greece/CPI: Greek consumer prices fell 1.7 percent in December, with the annual pace of deflation easing from the previous month when it set a record, data by the country's statistics service showed on Monday. The EU-harmonized deflation rate slowed to -1.8 percent from -2.9 percent in November. Eurozone inflation fell in December to 0.8 percent, increasing the European Central Bank's challenge of avoiding deflation.

Greece/Renewables:  The tax burden on energy has to be lowered, while renewable energy resources need to be introduced in a rational way and at competitive prices, Environment and Energy Minister Yiannis Maniatis told an energy conference on Monday.

Privatizations/DEPA: Greece has given Russian energy giant Gazprom a 10-day ultimatum to decide whether it will lower the price of natural gas provided to the Public Gas Corporation (DEPA) to that charged in other European countries or face arbitration. The chairman and chief executive of DEPA, Haris Sahinis, told Gazprom Export that unless the Russian company can offer a one year retroactive rate closer to the European average of $380 per 1,000 cubic meters, the Greek government will not be able to agree. The distance between the two sides is not that far as the Russians are reportedly open to a six months retroactive rate of $390 per 1,000 cubic meters.

Eurobank Properties: As of today the 61,000,000 rights of the company are admitted to trading on the ATHEX, following the recent share capital increase carried out in the form of a rights issue. The pre-emption right’s trading period is set from January 14, 2014, to January 22, 2014, included. The start price is set at € 1.85 for EUPROR. The pre-emption right’s subscription period is set from January 14, 2014 to January 28, 2014, included.

Viochalko: According to internet articles Viochalko may proceed with a parallel listing to ASE in early February.

ASE/December FY 2013 Stats:  Net capital inflows from foreign investors in the Greek capital market for 14th consecutive month were more than outflows. Participation of foreign investors in the total market capitalization reached 49.6% compared to 48.5% at the end of november increased by 2.3%. In case the participation of HFSF capitalization was counted (€22,584.68 million or 37.6%) the participation of foreign investors amount 31.0% compared to 29.4% at the end of previous month decreased by 5.4%.  Foreign investors in December 2013 made 52.2% of total turnover. Regarding 2013 Average Daily Value (ADV) of transactions settled at €86.62 million versus €51.91 in 2012, significant increase of 66.87% while total market turnover was at €21.31 billion compared with €12.93 billion in 2012. (64.81% increase) Net capital inflows from international investors in the Greek Market were €2,331.88 million. Decrease in the participation of international investors in the total market capitalization to 49.6% from 50.1% in December 2012. Finally we note that in the first 7 sessions of 2014 average daily volume is up by 70% (€112.2m vs €70.9m). Sarantis: Sarantis Group announced that it signed an agreement for the exclusive representation and distribution of the brand STREP in Greece. STREP belongs to the company CONTER S.r.l. Having a market share of approximately 13%, STREP holds the second largest position in the depilatory market. Sarantis Group already cooperates with CONTER S.r.l. in Greece, representing and distributing the brands DENIM, TESORI D’ORIENTE and VIDAL. It is noted that no cost was assumed by Sarantis Group for this agreement.  Minor positive for the Group. The agreement will generate in total annual sales of EUR 0.5m representing c. 0.2% of Group’s sales. Interestingly, Conter S.r.l. is one of the largest shareholders of Sarantis holding c. 10.02% of Group’s share capital through Argos SPA. We remind that Argos Spa acquired its stake in Sarantis on September of 2013 at market price (closing price on this date at EUR 5.1/share). Part of this stake was acquired by Fairfax.

Folli Follie: The company announced that it reached a deal with Authentic Brands for exclusive wholesale, retail distribution rights in continental Europe, U.K., Ireland and Cyprus for Juicy Couture brand. In terms of pricing Juicy Couture is considered as an expensive brand with great brand awareness. We remind that Folli Follie Group has already the exclusive representation of Juicy Couture brand for Greece, Romania and Bulgaria. The deal will have a positive effect on the Retail/wholesale division that in 2012 accounted for 12.2% of Group’s total sales (excl. Travel retail division). No financial details were announced by the Company.

Manos Chatzidakis

Head of research

Beta Securities S.A.

29 Alexandras Ave.

GR - 11473

Athens, Greece

Tel: +30 210 6478755 /754

Fax +30 210 6448791

Email: mchatzidakis@beta.gr