Manos Chatzidakis : Μαrket Comment - In the Spotlight

Market Comment

Greek stocks extended their rally for the fourth consecutive session on Thursday, with buying activity remaining focused on bank shares. General Index is posting a net gain of 9.7% since last Friday, FTSE-25 is at +13.3% and Banking Index is soaring by 50%. General Index runs 6 consecutive positive weeks which is in line with the overbought short term technical picture. While the momentum is still strong we continue to believe that the potential of a sharp correction due to the extraordinary gains in the banking sector is high.

Focus today will be primarily around the trading of Alpha Bank rights which will set the trend for the Greek market.

Gains in Banking Sector since May 10

Bank sector stocks	16/05/2013	10/05/2013	Δ(%)
Eurobank	0.59	0.265	123.0%
Alpha Bank	0.615	0.485	26.8%
Bank of Piraeus	0.575	0.295	94.9%
NBG	1.50	0.995	50.8%
Bank of Attica	0.499	0.254	96.5%

¢           In the Spotlight

Alpha Bank: As of today the 534,269,648 rights (ALPHAR) 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 May 17, 2013, to May 27, 2013, included. The start price is set at € 2.83 for ALPHAR. There is no daily ceiling/floor limit for the rights’ trading. The pre-emption right’s subscription period is set from May 17, 2013, to May 31, 2013, included.

Greece/ Inflation: Greece fell deeper into deflation in April, with the inflation rate falling to -0.6 pct, from -0.2 pct in March and 0.1 pct in February. The average inflation rate in the Eurozone fell to 1.2 pct in April, from 1.7 pct in March and in the EU-27 the inflation rate fell to 1.4 pct from 1.9 pct over the same periods respectively. Greece (-0.6 pct), Latvia (0.4 pct) and Sweden (0.0 pct) recorded the lowest inflation rates in the EU, while Romania (4.4 pct), Estonia (3.4 pct) and Holland (2.8 pct) the highest rates.

Greece/ Trade Balance: Greece's trade balance showed a deficit of 3.7 billion euros in the first two months of 2013, according Eurostat data published on Thursday. Greek exports grew 11 pct in the January-February period to 4.3 billion euros, from 3.9 billion in the same period last year, while imports grew 7.0 pct to 8.1 billion euros from 7.5 billion euros, leaving the country with a slightly higher trade deficit of 3.7 billion euros, from 3.6 billion euros last year. Germany (30.4 billion), Holland (9.3 billion) and Ireland (5.1 billion) recorded the highest trade surplus in the two-month period, while the UK (17.9 billion), France (15.3 billion), Spain (3.8 billion) and Greece (3.7 billion) the highest trade deficit.

Banking Sector: Fitch Ratings οn Thursday upgraded Greece's four systemic banks in the aftermath of its decision to upgrade the country's credit rating on Tuesday. Fitch said it upgraded National Bank of Greece, Piraeus Bank, Alpha Bank and Eurobank Ergasias Long-Term Issuer Default Ratings to 'B-' from 'CCC', Short-term IDRs to 'B' from 'C' and Viability Ratings to 'b-' from 'f'. The agency has also revised the Greek banks' Support Rating Floors to 'No Floor' from 'CCC'  and affirmed the Support Rating at '5'. These rating actions follow the banks' recapitalisation and a more stabilised macroeconomic environment in Greece, which is reflected in the agency's upgrade of Greece's sovereign rating to 'B-' from 'CCC' with a Stable Outlook. The Outlook on the banks' Long-term IDRs is Stable, reflecting the close correlation with that of the sovereign.

Cyprus/Banks: Cypriot banks’ reliance on Emergency Liquidity assistance, or ELA, which is extended by the Nicosia- based Central Bank of Cyprus, stood at E11.4b at the end of April.

Intralot: HRADF announced that Intralot and an investment fund led by the French betting company PMU were qualified to the second phase of the tender process for the 20-year concession to conduct mutual betting on horse-races in Greece.

Greece/ RES Tariffs: Greece will cut the premium rates it pays for solar power, the highest such tariffs in the European Union, by as much as 48 percent to curb growth following record installations in the first quarter. The government approved a proposal to lower feed-in tariffs for photovoltaic projects installed after June 1, according to its official journal. The rates will be 9.5 euro cents to 12.5 euro cents (13 to 17 U.S. cents) a kilowatt-hour, depending on project size, down from 17.2 euro cents to 23.9 euro cents now. Greek solar capacity rose by a record 800 megawatts last quarter after tripling in 2012, prompting further government steps to cut the cost for consumers of subsidizing the industry. The country approved a temporary tax on the revenue of operating clean-energy plants in November and is considering extending it.

Other Q1 results

Petropoulos	Results Q1 2013
In thous. Euro	2012	2013	Δ
Sales	11,292	10,242	-9.3%
EBITDA	-314	429	-236.6%
(% of sales)	-2.78%	4.19%	+697 bps
Net Income	-846	-210	75.2%
(% of sales)	-7.49%	-2.05%	+544 bps

MLS	Results Q1 2013
In thous. Euro	2012	2013	Δ
Sales	2,110	2,190	3.8%
EBITDA	1,265	1,550	22.5%
(% of sales)	59.95%	70.78%	+1,082 bps
Net Income	436	570	30.7%
(% of sales)	20.66%	26.03%	+536 bps

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