Market Comment - In the Spotlight by Manos Chatzidakis

Market Comment

Greek equities were battered on Friday as Athens SE plunged 4% closing below 1,050 points adversely affected by Russia’s countermeasures against EU hitting Greece’s exports. Athens General Index now counts ten consecutive sessions in the red with an overall loss of 13.8% on a ten-month low. Strong selling pressure across the board, picking up momentum at the closing stage of the session. Bank of Piraeus, Eurobank, Titan Cement and Hellenic Exchanges suffered losses of 7.35%, 6.35%. 6.05% and 5.30%, respectively. Best performer…OPAP ending down 0.85%. Daily turnover remained at relatively high levels reaching EUR132m.

As for today, we expect a technical rebound, while recent stock de-rating offers attractive entry point on valuation grounds (ie OPAP, Jumbo, Mytilineos, Hellenic Exchanges).

 In the Spotlight

Building activity: The volume of private building activity rose by 10.4% y-o-y in May, while the number of building permits issued by authorities increased 1.5% y-o-y according to Hellenic Statistical Authority. In the January-May period, building activity fell 22.7% in terms of permits and 9.4% in terms of volume, compared with the same period in 2013.

Car registrations: In Jan-July period, new and used cars put into circulation for the first in Greece increased 28.1% to 63,026, from 49,214 new registrations while new motorcycle registrations increase 7.4% y-o-y in Jan-July period to 22,031 in same period year earlier according to National Statistical Authority. Cars put into circulation for the first time in July was up 25.9% y/y to 10,744 while new motorcycle registrations increase 12% y/y in July to 5,057 a year earlier.

Industrial production: Greek industrial production fell 6.7% in June from the same month a year earlier, compared with a revised 0.9% fall in May, according to Hellenic Statistical Authority. Specifically, mining and quarrying -3.7%, manufacturing -3.6%, electricity production -18.2% and water supply production -1.6%.

Greece/13-Week T-Bills: PDMA announced that Greece is set to sell EUR1bn in 13-Week Treasury bills on August 12.

Intralot: On August 8, HRADF (Greek state asset development fund) announced that Intralot submitted EU5.2m binding offer for Greek Horse-Racing Bet Concession.

Forthnet: Forthnet reported a net loss of EUR3.2m in H1 2014 vs a net profit of EUR7m over the same period last year. In Q2 2014, consolidated revenues reached €97.5M, up 4.2% against Q2 2013, for the first time after 9 quarters, despite the decrease in Fixed Termination Rates (FTR). The FTR drop affected revenues by €11M in Q2 2014. Adjusted EBITDA of Q2 2014 reached €16.32M versus €16.27M in Q2 2013. Total bank debt stood at €325M in June 2014.

At the end of June 2014, Forthnet served more than 344k bundled/3Play households – a 68.4% increase compared to June 2013. For Q2 2014, Nova 3Play net additions were 20.1k, an increase +9.5% compared to the same period last year.

By the end of Q2 the telecom services subscriber base increased by 11.7% y-o-y and reached 667.8k subscribers.

The subscriber base in pay-TV grew by 29.4% y-o-y, reaching 482.5k households, which is an all time high.