Market Monitor by Manos Chatzidakis

Market Comment

 General Index continued rising on Thursday, albeit at a much slower pace (+0.54%) due to investors exercising caution ahead of the results of Athens’s negotiations.Turnover amounted to €75.4μn, down from Wednesday’s €91.1mn.

After three positive sessions and ahead of the weekend investors may square their positions as negotiations with Troika seems to have stalled. Fitch releases its credit rating review on Greece today (after market hours) while November future contracts expire (14:00).

¢           In the Spotlight

Greece/Privatisation:  The state privatisation agency said on Thursday it has sold online four properties in the old Plaka district of Athens for 1.34 million euros, while it announced it will open concession bids on Greece's regional airports on Monday (technical bids) and Tuesday (financial bids).

Greece/Current Account Surplus: Bank of Greece said that September 2014 Greek current account surplus rose to EUR1.6bn, up EUR652m over the same period last year. This development mostly reflects improved balance of goods and services driven by significant rises in oil export receipts and travel/transport receipts.

¡  In addition, Greece’s trade deficit contracted by EUR223m y-o-y, on the back of lower net import bill for oil and ships.

¡  However, trade deficit excluding oil and ship was up, as import bill grew faster (11.6%) vs a exports receipts (9.4%)

¡  January-September 2014 current account balance recorded a surplus of EUR3.8bn, against EUR2.4bn over the same period a year ago

¡  Moreover, overall balance of goods and services showed EUR3.2bn surplus vs EUR1.4bn in 2013 fuelled by improved services balance.

¡  January-September 2014 total exports of goods and services were up 8.5% (+2.8% in 9M 2013). More specifically, exports of goods receipts grew 4.2%, while receipts from services were 11.6% higher.

ΗΤΟ:  OTE needs to acquire govt’s 46% Romtelecom stake in order to consolidate the Romanian phone mkt, CEO Michael Tsamaz said at an investor event in Barcelona organized by Morgan Stanley. According to HTO’s CEO Romanian govt has decided IPO isn’t best option for stake. Greek govt hasn’t sold part of its 10% stake in OTE because it’s been waiting for higher share price  However Greek Gov’t may fully exit OTE investment “at a later stage”. Deutsche Telekom will buy stake “because they want to retain management majority” and keep consolidating OTE.

Lamda Development (Results 9M/Q3 2014):  Net loss for the period, mainly due to investment property valuations, amounts to €4,7 million compared to losses of €24,7 million in the first nine months of 2013.  The difference is attributed to the one-off accounting adjustment effect of €11,8 million that relates to deferred taxation triggered by the 6% increase in corporate tax rates from 20% to 26%. In specifics:

¡  Shopping Centers posted an increase of 5% reaching €28,1 million in the first nine months of 2014.  EBITDA attributed to the Group reached €22,9 million, with an increase of 5% compared to the equivalent period last year. Aggregate shopkeepers' turnover in our three malls increased by 9% while total customer visits increased by 6,5%.  Average occupancy of our Shopping Centres' exceeds 98%, and demand for retail spaces is increasing. 

¡  Flisvos Marina, following consecutive quarters of operational losses, posted a positive EBITDA of €0,1 mil., compared to €0,2 mil loss in the equivalent period last year

¡  Net Asset Value before Taxes reached €455,9 million (€5,72 per share) compared to €296 million on 31/12/2013.  The recent Share Capital Increase in cash as well as the sale of treasury shares contributed a net amount of €163 million to the Net Asset Value.

Lamda Development	Results 9M 2014
In thous. euro	2013	2014	Δ
Sales	34,473	32,281	-6.4%
Q3	10,852	10,232	-5.7%
EBITDA	-2,016	6,138	404.5%
(% Sales)	-5.85%	19.01%	+2,486 bps
Q3	3,985	5,271	32.3%
(% Sales)	36.72%	51.51%	+1,479 bps
Net Income	-24,767	-4,921	80.1%
(% Sales)	-71.84%	-15.24%	+5,660 bps
Q3	1,655	1,557	-5.9%
(% Sales)	15.25%	15.22%	-3 bps

Motor Oil (Results 9M/Q3 2014): In the conference call yesterday management stated that Q4 refinery margins continue strong while in the domestic market they expect positive growth from heating oil sales due to the reduction of special tax and the price drop. Management stated that expects lower inventory fluctuations in the following year.  Targeted amount of debt is at €600m which is however related to working capital needs. Regarding dividend for FY 2014 the decision will be subject to Q4 performance.

Motor oil	Results 9M 2014 Reported
In thous. euro	2013	2014	Δ
Sales	6,983,912	6,971,244	-0.2%
Q3	2,552,209	2,442,524	-4.3%
EBITDA	145,083	124,809	-14.0%
(% Sales)	2.08%	1.79%	-29 bps
Q3	84,016	63,852	-24.0%
(% Sales)	3.29%	2.61%	-68 bps
Net Income	214	178	-16.8%
(% Sales)	0.00%	0.00%	-0 bps
Q3	31,888	16,806	-47.3%
(% Sales)	1.25%	0.69%	-56 bps