Market Monitor by Manos Chatzidakis

General Index rose by 0.98% on Friday, in a technical rebound of the market after a three-day decline which pushed the market 8.51 pct lower. The Greek market followed a recovery in international markets after a decision by the Bank of Japan to expand its state bond purchase program. 

The composite index of the market rose 0.98 pct to end at 915.83 points, after rising as much as 2.95 pct during the session. The index lost 13.73 pct in October, extending its decline for the seventh successive month. The index was down 7.62 pct in the week for a net loss of 21.23 pct so far this year. Turnover eased to €129 million down from Thursday’s €180m. Despite Friday’s bounce, volatility may continue as investor’s psychology remains fragile. 

Weekly agenda is full of scheduled events almost every day of the week: Alpha bank and Grivalia Properties (ex Eurobank Properties) announce their Q3 results on Tuesday, PDMA will auction €875m 26 week T-bills on Wednesday, HTO and Coca Cola will announce their Q3 results on Thursday before the bell while Eurobank announce its Q3 on Friday after the session.

On Friday Eurobank, NBG and Alpha bank general meetings will decide on DTA to DTC conversion. Political events will also be in the spotlight as PM Samaras and Siriza leader Tsipras will be visiting today President Mr. Papoulias.

¢           In the Spotlight

Greece/Disposable income: The reduction of Greek households’ disposable incomes in 2013 compared with 2012 amounted to a total of 14 billion euros, the biggest since the start of the crisis according to data released by the Hellenic Statistical Authority (ELSTAT). Disposable cash amounted to 122.2 billion euros last year, from 136.2 billion in 2012 – i.e. a 10.3 percent reduction within just one year. On the reduction recorded last year, the statistics office says in its report that it was due to the reduction in workers’ pay by 10.7 percent year-on-year and the 12.3 percent drop in the amount of social benefits that households received. Regarding consumption, ELSTAT data showed that it has followed the course of disposable incomes: Households’ consumer spending declined by 4.8 billion euros or 3.6 percent last year from 2012, amounting to 129.9 billion euros, against 134.7 billion in 2012. The year with the highest consumer spending by households was 2008, when 164.6 billion euros was spent.

Greece/Ports Passenger traffic: National Statistical Authority said that Q1 2014 passenger traffic in Greek ports advanced 3.9% y-o-y, while cargo traffic posted an increase of 3.4% y-o-y.

Banking Sector: Reportedly HSF will supervise banking actions in order to reduce NPL’s. In other news HFSF may put a veto in new bank’s capital increases at current low prices according to press reports

Greece/Retail Sales: The statistics agency announced that retail sales in August were increased by 4.5% y-o-y, while they posted the same increase even if we exclude automotive fuels. This is the largest increase recorded since 2010. In terms of volumes, retail sales increased by 7.4% y-o-y (or increased by 4.7% including automotive fuels). In specifics:

¡  Food & Beverages volumes were remained in negative ground during the 8M period y-o-y but posted strong recovery during August clearly benefited by the increased tourist inflow in the country and relatively good weather conditions.

¡  Department Stores’ volumes were decreased by 9.6% during the 8M period, while they remained in negative ground during August 2014 posting decreased volumes by just 2.9%.

¡  Furniture and electrical equipment market remained under pressure for both August and the 8M period posting decreased volumes by 2.2% and 7.1%, respectively

¡  Volumes in apparel/footwear were increased by 6.7% for the 8M period and by 9.7% during August 2014 benefited from soft weather conditions that allowed an earlier start of the summer season period and increased tourist inflows.

Alpha Bank: Alpha bank will announce its Q3/9M results tomorrow after the end of the session. We expect sequential quarterly improvement on NII to €498m vs €480m in Q2 on lower funding costs (ECB, Deposits) and a relatively stable fee income at €100m. On a pre provisional level Alpha should post €285m. VRS should impact balance sheet by a negative one off of €190m while recently acquired Citibank’s retail banking figures will increase loans (€0.4bn) and deposits (€0.9bn) improving deleveraging ratio. On the bottom line reported losses are expected at €180m A conference call will follow at 18:00 (GR Time). CC details: 

Greece: + 30 211 180 2000

¡  UK: + 44 (0) 800 368 1063

¡  US: + 1 866 288 9315