Greek equity & fixed income market commentary - good Greek price motions, Piraeus alive & kicking and Emma playing games

Greek equity & fixed income market commentary - good Greek price motions, Piraeus alive & kicking and Emma playing games

ê          Greece and Cyprus assets have performed admirably the last two trading sessions & much ground has been regained since the Cyprus depositor haircut shock event/crisis

ê          In the words of Central Bank of Greece governor, the country has avoided the Cyprus contagion but more importantly he argues/claims that deposits are returning to the country

ê          The latter is indeed good news

ê          The recent price action has witnessed Greek Banks outperform. Piraeus Bank for instance was up today by circa 20%

ê          We note here that from 'zero to hero' Piraeus Bank also announced an agreement with the Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank to acquire

ê          the treasury, clearing and settlement operations in Greece, along with CPB's mutual funds operations [source: BBG]

ê          Not bad for a bank that most street players were characterizing as being 'the weak link'

ê          Underperformance today came through from OPAP. The price drag was driven by delays from the Emma Delta better price seek bid re-submission

ê          The news-flow headline read:

ê          *GREEK ASSET SALES FUND EXTENDS DEADLINE FOR OPAP BID TO MAY 1

ê          *GREEK ASSET SALES FUND EXTENDS DEADLINE FOR EMMA DELTA OPAP BID

ê          To remind, the HRADF’s board of directors convened today to evaluate the new offer of Emma Delta [the sole bidder for a controlling stake in Greece’s betting monopoly]

ê          We understand that Emma Delta has asked more days for the submission of its final bid

ê          We also note that there is a gap of €30mn between Emma's initial offer of €622m & the valuation of HRADF’s independent appraiser amounting to €650mn

ê          Both figures exclude the €60m dividend payment for 2012 attributed to the 33% of OPAP shares

ê          Although unlikely to happen, given the political drive and symbolic importance to get this past the finishing line, the risk remains that

ê          the privatization agency could cancel the tender process if Emma Delta’s new financial offer does not match the valuation of HRADF’s advisor

ê          This would naturally be a negative development as consensus view has been that Emma Delta would improve its financial offer today

ê          Moving to oil territory. We highlight also tonight ELPE developments. Hellenic Petroleum is going to issue a bond to finance its investment program which will exceed €1.2 billion?

ê          The amount of the issue is very much market feedback dependent. The road shows have been completed, so we are awaiting further information to have a better picture

ê          We close tonight by sharing two interesting reads:

ê          [1] Three years of collective failure. The press article/link also includes  the most comprehensive assessment, published by the Exotix research department [Gabriel Sterne] of where the Fund has got it wrong

ê          http://www.presseurop.eu/en/content/article/3716641-three-years-collective-failure

ê          [2] Rwanda benefits from ‘frontier’ search for yield. Some info in there also around Cyprus

ê          http://www.ft.com/cms/s/0/cff75298-acfd-11e2-b27f-00144feabdc0.html#axzz2RSqh6CVV

Have a nice evening/weekend. Catch up Monday with more Exotix thoughts