Market Comment-In the Spotlight (Manos Chatzidakis)

Market Comment

 

General Index ended significantly lower on Friday, losing the biggest part of the ground it gained during their five-day rally which pushed the composite index of the market 3.37 pct higher. Geopolitical concerns, following developments in Ukraine and Israel weighed heavily on investors psychology increasing offer across the board. General index fell 2.69 pct to end at 1,158.24 points, off the day’s lows of 1,155.93 points. The index ended the week with a net gain of 0.29 pct and it stands 0.38 pct lower so far this year. Broadly, decliners led advancers by 84 to 28. Today we expect a moderate bounce in the beginning of the session following the rebound of major international markets on Friday.

European Union foreign ministers meet to decide on further sanctions against Russia amid instability in Ukraine, while 2Q earnings announcements continue in US this week (Apple, Facebook, Boeing, Coca-Cola, Credit Suisse, Microsoft). Regarding domestic events “Anemos” shares debut tomorrow in ASE while Lamda Development new shares from capital increase start trading on the 22^th. 

In the Spotlight

Banking sector: According to press articles Finance ministry disagrees with concept of creating “bad bank” to tackle non-performing loans. In other related news two thirds of Greek businesses are unable to service loans. According to an announcement by the central bank, which followed an assessment of the increase in enterprises which are experiencing problems with loan payments, one third of Greek businesses are healthy and have significant prospects. Enterprises whose debts correspond to around 20 percent of the total of their loans were deemed to be in a healthy state. The bank also deemed that a significant proportion of Greek enterprises would see their prospects improved by some kind of loan restructuring.

HSF/Banking Sector: In an interview Ms Sakelariou CEO of HSF expressed the view that any new capital needs the upcoming ECB stress tests are under control. She also mentioned that out of €50bn funds injected in the banking sector €30bn could be recovered.

Greece/Privatizations: Greek Asset Sales Fund expects bids for peripheral airports to be submitted in September.

Cyprus: A surge of Russian tourists in June sparked an 11 percent increase in holiday arrivals to Cyprus compared with the same month last year, official data showed on Friday. It was the second largest percentage rise since 2011. In June, arrivals spiked 11 percent to 342,221 from 308,219 in 2013, the figures show.

Bank of Cyprus:  Jefferies offers to buy new Bank of Cyprus shares, to be offered as part of capital increase transaction, at EU0.25 a piece on condition it can acquire at least 40% of new shares

Frigoglass: The company intends to shut down its Turkish manufacturing unit by end-2014 and integrate Turkey-based production volumes into Frigoglass’ Timisoara (Romania) flagship plant. Faced with lower demand levels in Europe, this move aims at reducing Frigoglass’ cost structure and enhancing long-term competiveness. Meanwhile, commercial and customer service activities in Turkey will remain intact. With regards to the expected annualized cost savings linked to the closure of Turkish plant, Frigoglass will provide an update during is H1/Q2 2014 group results announcement on August 7.