Market Comment -- In the Spotlight

Manos Chatzidakis	9:35 π.μ. (Πριν από 41 λεπτά)

Market Comment General Index continued its rally on Friday closing positive (+0.5%) for seventh consecutive session. In 2014 the market hasn’t seen yet a negative close while turnover is gradually increasing absorbing short term profit taking. The new element for optimism this time came from the banking sector as Bank of Greece permitted on Friday the full inclusion to Core Tier I of deferred tax from PSI. Investors feel more confident that additional CT1 buffer will be adequate for new NPL’s limiting the potential of a new capital raise. We expect banking sector to be in the spotlight today keeping the index to positive area despite significant short term gains across the board.   In the Spotlight Banking Sector: With the changes introduced by the BoG Exec. Committee Act 36/ 23.12.13 on Friday the Bank of Greece Exec. Committee abolishes the 20% threshold on DTA set by previous decision of the BoG Exec. Committee, therefore allowing for full recognition of DTAs in the CT1 calculation. The new rule re-aligns BoG capital calculations with CRD4 (from 20% DTA allowance to 100% inclusion in CT1 with a phasing out over 10 years up to 2023).  The new rule re-aligns BoG capital calculations (from 20% DTA allowance to 100% inclusion in CT1 with a phasing out over 10 years up to 2023 providing more flexibility and buffer to avoid future capital increases. It is noted that the Tangible Book Value of the banks remains unchanged. While from 31/03/2014, DTA will gradually amortize by 10% each year. As a consequence of this development we estimate the following changes in CT1: Bank                      Prev. CT1 (9M ’13)              CT1 (DTA @100%) Alpha bank           13.5%                                    14.5% National Bank     9.4%                                      15.5% Eurobank              8.1%                                      13.5% Piraeus Bank       13.5%                                    15.0% Greece/Privatizations: According to press articles the deadline for the submission of binding offers for the major privatization project concerning the development of the Athens’s former international airport at Elliniko is apparently to be postponed to the end of February. Greece/PDMA:  Greece will auction tomorrow 1.25 billion euros of three-month T-bills refinance a maturing issue, the country's debt agency PDMA said on Friday. Previous auction was settled at 3.90% interest coupon. Greece/Car Sales:  Car sales posted a yearly increase in 2013 for the first time since 2008, according to official data released on Friday by the Hellenic Statistical Authority (ELSTAT). The number of vehicles coming on to Greece’s roads for the first time – new and used only abroad – numbered 78,630 last year, up from 77,675 in 2012 – i.e. 1.2 percent growth. Sales of new private cars posted a significant rise, increasing 0.6 percent to 58,659. The main reason for the rebound is reportedly the purchase of corporate cars mostly by tourism-orientated enterprises, such as car rental companies. Piraeus Bank:  Piraeus Bank announced that as of January 7th 2014, York Global Finance Offshore BDH 7,155,101 voting rights corresponding to an equal number of common, registered, voting, dematerialized shares (0.14% of the total voting rights of the Bank) as well as titles representing shares ownership rights (Warrants), which if they were exercised in full, they would correspond to 250,753,022 voting rights (4.94% of the total voting rights of the Bank).

Manos Chatzidakis

Head of research

Beta Securities S.A.

29 Alexandras Ave.

GR - 11473

Athens, Greece