Market Comment

After three straight sessions of considerable stock gains, investors cashed in on their profits on Friday, at the end of the fifth consecutive week with an increase (by 5.16 percent) for the benchmark index. Turnover remains rich, above €100m,  positive sign for participation and stocks rotation.  As most non financial stocks declined from their recent highs in the last two sessions of the week we expect a small range reaction today in the beginning of the session.

¢           In the Spotlight

Alpha Bank (Results 3M 2013 – Conference Call): Alpha Bank reported on Friday a net profit of €2.4bn. Main one-offs included €2.4bn negative goodwill on Emporiki and €192m trading gains (mainly related to convertible bond to CASA), resulting in an underlying net loss of €244m. In specifics:

¡         NII remained under pressure to 1.8% fro 2.0%. However management seems confident that the decline is attributed to Emporiki’s integration and on the forthcoming quarters this trend will reverse.

¡         Provisions for loan impairments rose to 505 million euros. NPL’s stood at 30.1% from 28.6% and the coverage ratio remained at 52%.

¡         Management stated that the capital requirement for Cypriot operations was €149m under the adverse scenario, and highlighted that this was based on a 25% loan loss.

Finally we note that today the stocks are trading without the rights to participate in the capital raising. Adjusted opening price is set to €0.485. We remind that the ratio is 1.944456 new shares for every existing common share at a subscription price of €0.44. The rights subscription period will run between 17-31 May and the rights trading period will run between 17-27 May. Alpha will announce details about subscription and rump on 3 June, while new shares (and related warrants) will start trading on the ASE on 10 June. 

 

Greece/PDMA: Greece will auction 1 billion euros of three-month treasury bills on Tuesday to refinance a maturing issue, the Public Debt Management Agency (PDMA) said on Friday.

                        

Greece/ Budget execution: Budget deficit at central government level shrank in the first four months of the year, remaining on track to meet fiscal targets under the country's international bailout. The reading narrowed to 330 million euros from 1.7 billion euros in the same period last year, the finance ministry said in a statement. That compared to a deficit of 1.7 billion euros in the same period last year.The budget figure excludes the budgets of local authorities and social security organizations.

Greece/ CPI: Consumer prices fell 0.6 percent in April on an annual basis after a fall of 0.2 percent in March, its lowest reading since 1968. EU-harmonized inflation also decelerated to -0.6 percent from -0.2 percent in March. Meanwhile Greece's industrial output fell 0.7 percent year-on-year in March after a downwardly revised 4.3 percent drop in the previous month, according to ELSTAT.

Greece/ Imports – Exports: Greek export and import fell in March, the Hellenic Statistical Authority (ELSTAT) said on Friday. In a report on the country's merchandise trade, the statistics service said the the value of import-arrivals totaled 3.655 billion euros in March, down 29.6 pct from the same month last year, while the value of export-deliveries totaled 2.075 billion euros in March, down 7.8 pct from March 2012.

Greece/ Privatisations: Greece’s state-asset sale fund has changed the terms to bid for gas supplier Depa and gas-grid operator Desfa. Sintez Group will be allowed to make binding bid for Desfa only and not Depa as well. Move will avoid conflict between Sintez and Gazprom that wants Depa Deadline for binding bids for Depa, Desfa is May 29.

NBG: National Bank of Greece is to absorb the healthy portion of First Business Bank (FBB), following an offer made to the central bank that was approved by Greece's Fiscal Stability Fund shortly after midnight on Saturday. FBB's network of 19 bank branches will operate as part of and under the responsibility of NBG, with all transactions with customers, deposits and loans being carried out as normal. According to a Bank of Greece announcement, NBG's offer for the healthy portions of FBB fully protects the deposits of all the bank's customers and ensures their continued, unobstructed service. NBG will take over all the deposits and the majority of the loans, with the exception of those that have been declared non-performing. Any difference between the estimated value of the assets and the actual value will be covered by the Fiscal Stablity Fund.

Manos Chatzidakis

Head of research

Beta Securities S.A.