By Demosthenes Trigas

2022 would not be a milestone for the Greek economy, as the conquest of the investment grade may come earlier than the initially estimated 2023. What is the factor that can make a difference, bringing the investment grade earlier than 2023, which was expected ; It is recalled that Fitch and Standard & Poor’s (eligible companies) maintain the highest rating for the country’s reliability two steps behind the “coveted” investment!

“The next scheduled review of the Greek rating is recorded on January 14, 2022. Greater confidence in public debt / GDP, which returns to a steady downward trend, and the continuous improvement of the quality of the banking sector assets could lead to a positive rating “Failure to reduce public debt / GDP in the short term could lead to negative action.” This was the final paragraph of the rating agency Fitch in the announcement for the growth forecasts of the Greek economy in October 2021.

The ECB ‘s announcements that the bonds that will be based in Greece on the resumption of the PEPP prosperity that expires, if it is incorporated, constitute a shield for the cost of financing the Greek debt. The announcement of the ESF, but also the response of Mrs. Christine Lagarde for flexibility in the Greek bond markets, could “arm” the hand of the rating agencies with an upgrade, as it substantially reduces the risk of increasing the cost of servicing the Greek debt, installing a temporary protection shield!

The rating agency Scope Ratings (German rating agency), but not very popular, said that the country’s rating and prospects could be upgraded if the ECB’s support for Greek bonds is strengthened after the expiration of the emergency measures due to a pandemic announced to expire in March (September 2021 announcement). Which the ECB actually said a few days ago!

At the same time, the same house had noted that the contraction of NPEs of Greek systemic banks with a simultaneous increase in lending to the private sector was another criterion for upgrading the country’s debt. If nothing else, the first criterion seems to be leading to a significant improvement, while the second still has a way to go, despite all the efforts made, as the ratio of loans to deposits is still very low compared to the other average. It is worth noting that this house has the country only one step from the investment (see table), ie higher than the 4 most popular houses (Fitch, S&P, Moody’s or DBRS Morningstar).

At this point we must note that the investment grade for Greece is a milestone for the economy, which it lost in 2010. Those who have the Eurosystem as eligible houses in the scheduled evaluations, but also need in exceptional cases the houses that are needed. That is, if the Scope Ratings upgrades us, it can not be included in the ESF program, since this house is not on the Eurosystem list.

In conclusion, the truth is that in any case the glass, as half empty as it seems, the more one can see half full. However, companies evaluate both quantitative and qualitative criteria that assess the credibility of states. In particular, Fitch said last July that the main reasons for the “BB” rating are the high debt-to-GDP ratio and the large volume of banks’ NPLs. On the other hand, Greece has indicators that are better than countries that have “BBB” or higher rating, such as the relatively higher per capita income and ESG-Governance, according to international indicators.

Finally, as long as the forecasts for GDP growth continue, borrowing costs remain low and NPLs shrink significantly, Greece may be in the investment grade of the expected 2023 and the Greek Stock Exchange may see with “smaller diameter binoculars” 1,000 units!

OTE: Extraordinary General Secretary for the cancellation of 8,638,512 treasury shares

OTE has convened an extraordinary general meeting. on January 18, 2022, with the main issues of approval of the program for the acquisition of own shares, as well as the approval of the cancellation of the 8,638,512 own shares that the company has acquired within the framework of the program for the acquisition of own shares. If approved by the general meeting, then the new share capital of the company will be available in 448,100,608 shares, with Deutsche Telekom holding 49.22% of the company’s share capital. It is reminded that after the purchase of additional shares reaching 7 million, the main shareholder will reach 50%.

Note that Deutsche Telecom must announce the financial results 2021 on Thursday, February 24, 2022, which means that OTE has announced no later than this date. It is recalled that last year OTE’s announcement was made on the same day as DT.

Finally, in terms of valuation and according to market estimates, OTE trades 6 times the operating profit (EBITDA) of 2022 based on the index (EV / EBITDA), while the share trades 14 times (P / E) the adjusted earnings of 2022. OTE’s share outperformed the FTSE Large Cap, as its yield exceeded 26% against 10% of the index.

Lamda Development: The share is traded with a 7% discount

The total turnover of the stores of the shopping centers in the third quarter of 2021 recorded an increase of 22% compared to the corresponding period last year, as expected. In October 2021, the growth rate of the turnover of the stores accelerated, as the increase reached 34%. The most important thing, however, is that the total turnover of the mall stores in September 2021 was only 4% lower than in 2019, while October was higher by 5% compared to October 2019!

On the other hand, the positive impact of the 306 million euros that came from the revaluation, by an independent appraiser, of the value of the investment properties of Hellenic A. The one that made the difference in the financial results of the 9 months 2021. Recall that this amount appeared for the first time in the first half of 2021. The next valuation of the independent appraiser will take place on 31/12/2021. As it is understood, as the project progresses, the valuation will increase according to its progress. Thus, based on the accounting statements of the 9 months, the net asset value per share is 7.81 euros, compared to 6.23 euros on 31/12/2020 and 7.88 euros on 30/6/2021.

The share of Lamda Development underperforms significantly against the FTSE Large Cap (+ 9.5%) and the General Index (+ 9.1%), as it records losses of 4% since the beginning of 2021. It is recalled that Lamda Development had realized AMK in December 2019 with 6.7 euros per share.

Agenda (4/1/2022 – 9/1/2022)

I spare the news this week as well
Macroeconomic and corporate news for the first week of 2022 is limited. The agenda starts on Wednesday, with Filippo Naka having set a cut-off of the return of capital of 0.07 euros per share (partial return 3%). On the same day, the Bank of Greece has announced the bank interest rates on deposits and loans for November 2021. On Friday, ELSTAT announces the country’s commodity transactions for November 2021. Finally, on Thursday, the Greek stock market will remain closed due to the celebration. Θεοφανίων.

US non-agricultural payroll in focus

Abroad today, Tuesday morning, it is China’s turn to announce the Caixin PMI industrial index for December, followed by unemployment in Germany for the same month, the industrial PMI index for Great Britain and, finally, the afternoon in The change in the private non-agricultural sector for December in the US is announced on Wednesday, which comes two days earlier than the official data of the US public sector for the non-agricultural sector, while in the afternoon the ISM institute announces the non-industrial sector. PMI index for the same month, which shows us the economic conditions prevailing in the sector. Factory orders are announced on Thursday in both Germany and the USA (afternoon) for November, while at 15.00 inflation in Germany is announced for the same month. On the same day, the Walgreens Boots Alliance (Dow Jones) will announce the financial results for the first quarter of 2022. On Friday, industrial production for Germany is announced for November, followed by the Eurozone for inflation. In the afternoon of the same day, the non-agricultural payroll index is announced at the same time as the US unemployment index for April. The deviation from the market estimates for the wages of the non-agricultural sector gives strong volatility in the stock markets.

Happy New Year and happy 2022!
With health, joy and happiness!

* Mr. Demosthenes Trigas is a Certified Stock Analyst & Market BETA Stock Exchange

** Republished by the newspaper Capital