Black Box: What are the Franks looking for in Athens? Meeting at Maximou, with time for acquisitions, crisis day at the ATHEX and ball on the bonds
Today, 23 French companies are passing through the door of the Maximos Palace in order to meet with the Prime Minister Kyriakos Mitsotakis. Many investors are also going to discuss climate change in our country. The French companies, as the column learns, are interested in being located in Greece, in three main sectors. The first is energy. Europe’s dependence on Russian energy is being created in our country, mainly in the energy storage and RES sectors. The second area that company representatives ask is technology. With smart cities and digital transformation pique interest. The third sector is construction and infrastructure. And the defense industry does not leave the radar of the French.
According to information in the column, the French ask in particular about the Recovery Fund and the incentives given to our country for new investments. Among the companies located in Athens one can find Airbus, Bollore, EGIS, Naval, Safran, Vinci and many others. Surprises are not ruled out at today’s meeting in Maximou…
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One of the most critical days is next Thursday. The Athens Stock Exchange has been on a worrying slope lately, as investor concerns around the world have peaked. Our small market could not be differentiated. It did for a while, but now the reasons are more important and it necessarily follows the course of the international markets. In terms of the importance of the day we have several first quarter results and in the evening the MSCI decision. The house will tell us if the inflows made from abroad in April and went to the market at 950 units were justified. It should be reminded that there were large placements in heavy papers and mainly in National Bank and Mytilineos, because the investors discounted the entry of the two shares in the MSCI Greece Standard.
On the other hand, we have first quarter results from OTE, Titan, Piraeus Bank and ELPE. Piraeus will give an idea of the banks and we will probably learn how the energy crisis affects depositors and borrowers. Titan will give a reliable picture of how much it affects energy costs and transportation profits and of course will give an update of the outlook, if it has any reduction in demand due to high prices. The price of oil, the refining margins but also the demand is something that will analyze ELPE.
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The picture of the Greek stock market has been disappointing lately, due to what is happening abroad with the war, the restrictive measures in China, energy prices and inflation. The banking index completed 10 consecutive declining sessions, something we have been seeing since November 2015. At 16.5% the losses in that period, but the index still has gains since the beginning of the year. Alpha Bank has a decline as much as the index and absences of 17.8%. With losses of 17%, the National without having ten declines, since on 9/5 it closed with an increase. Eurobank has lost 14.95% in just 3 uptrends and 7 downtrends and Piraeus has lost 16.5% with 9 downtrends and a session that closed unchanged.
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The momentum of deals and acquisitions and mergers in 2021 will continue this year, as everything shows. At least that is what PwC estimates in its report, which estimates that by the end of the year it will exceed 8.6 billion. Euros of this type of agreements, with about 2.3 billion. euros do not have to come from private. Which industries will make the biggest contribution? The financial services with the most basic deal of 1.02 billion. euro, that of the acquisition of 49% of Viva Wallet will not be completed this year. Also, at the end of 2022, the increase of Allwyn Entertainment’s percentages in OPAP will be completed. Important in the “pie” of offers will be the contribution of technology with about 1 billion. with the most important transactions including the acquisition of the Greek company Mantis by the German Ecovium for 60 million euros, while EOS Capital Partners proceeded with the acquisition of the companies Archive Archive SA. and mod IT Services.
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Who will get this preservative? We are referring to the three-storey listed building that has a basement, is located in the Old Town of Nafplio and has been put on the market for sale through the special electronic platform of ETAD. The property has a total area of 323 square meters, is located on a plot of 100 sq.m. and its development presents prospects, if we take into account the strong tourist demand that attracts the old town of Nafplio. The building had been attempted to be utilized in 2019, but it did not succeed and now ETAD has, again, put a “shop”. Will there be interest? It will be seen on September 8, when the final submission of bids ends, with the amount of 36 thousand euros being set as the minimum price.
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Football is increasingly entering the stock market. It is not just about selling Chelsea, which is about to end up in the hands of American investors with a professional stock market background, nor about the landing of American private equities in Europe and Brazil, where they are constantly buying historic football teams. Last week, the procedures for the sale of the first football junk bonds began, ie bonds with a low credit rating, the interest of which will be paid from the income of football teams. They are sold by a consortium led by Goldman Sachs, with the participation of Deutsche Bank and Credit Suisse. The issuer of the bonds is the well-known private equity company CVC Capital Partners. According to Bloomberg, the bond issue amounts to 850 million euros and is not divided into two parts, one with a fixed interest rate and one with a floating rate. The issue does not receive a BB- credit rating, ie it will belong to the category of junk bonds.
The money will be used to finance part of the CVC’s investment move in Spanish Football. As we saw earlier in the liberal markets, the American investment company will invest two billion euros by buying a part of the television rights of 38 football teams participating in the two top football events of the country. Only the Four teams are not involved in this project, among them Real Madrid and Barcelona. The money that CVC will give to cover the teams for the defense of their financial and investment needs. In return, they will give the special company set up by CVC 8% of their insider from the sale of their TV rights, every year for the following years. If we are not mistaken, this is the first bond issue to finance football-related investments on the European continent. It comes in a very difficult stock market, of course, but it can be a good alternative for those looking for worthwhile bond yields, in addition to being the victim of a bad stock market situation and canceled.
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The shift to a more restrictive policy of the Central Bank will increase the government the cost of financing the bonds, as well as increase the cost of servicing the existing debt and eroding the budget, Citi points out. .
The reasons have to do with the fact that an increase in intervention rates in the current environment is not a cyclical improvement of the economy, but a consequence of external outbreaks of inflation. Citi estimated that the cost of financing governments more. Also, rising interest rates not only increase the cost of new government borrowing, but also the cost of servicing existing debt, as a significant portion of public debt has been exchanged for floating-rate debt based on the ECB’s deposit rate.
The exogenous nature of inflation suggests that the GDP deflator is not in line with the same consumer trend, but much less, which means that it has a more limited positive effect on the public debt / GDP ratio.
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The recent drop in Bitcoin spot prices, coupled with the geopolitical turmoil, is boosting the adoption of cryptocurrencies in inflation-emerging economies such as Turkey. Which saw trading volume skyrocket throughout April. The Bitcoin premium in Turkish markets rose to 1.7% in early May, as inflation reached 70% in April. This is reflected in the steady rise in both BTC-TRY and USDT-TRY trading volumes, suggesting that geopolitical tensions have played a role in increasing local demand for cryptocurrencies.
The fast-growing Turkish market has attracted the attention of large encryption exchanges seeking to expand their operations in the country, although Turkey has made recent efforts to regulate the industry.
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