Investment Opportunities For Foreign Investors In The Greek Stock Market
George Linatsas – Group Managing Director – Axia Ventures Group
December 2, 2010 The Athens Exchange General Index has reached multi-year low
7000.0
6000.0 5794.9 4978.6
5000.0
4000.0
3000.0 19xx 19xx 19xx20xx20xx 20xx 20xx Today
2000.0
1467 1419.7 1000.0
0.0 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
2 ATHEX General Index decoupling from PIIGS & European markets
4,000
3,500
3,000
2,500
2,000
1,500 19xx 19xx 19xx20xx20xx 20xx 20xx Today
1,000
500
0 26/08/09 26/09/09 26/10/09 26/11/09 26/12/09 26/01/10 26/02/10 26/03/10 26/04/10 26/05/10 26/06/10 26/07/10 26/08/10 26/09/10 26/10/10 26/11/10 26/11/07 26/12/07 26/01/08 26/02/08 26/03/08 26/04/08 26/05/08 26/06/08 26/07/08 26/08/08 26/09/08 26/10/08 26/11/08 26/12/08 26/01/09 26/02/09 26/03/09 26/04/09 26/05/09 26/06/09 26/07/09
ATHEX GI ISEQ (Ireland) PSI (Portugal) IBEX 35 (Spain) FTSE All Cap Italy STOXX 600
3 Market Cap to GDP at the lowest levels since 2001
105.0%
89.3% 90.0% 80.6%
75.0% 67.9%
60.0%
45.0%
19xx30.0% 19xx 19xx20xx20xx 20xx 20xx Today 34.8% 24.7% 21.6% 15.0%
0.0% 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2001 1/1/2002 1/1/2003 1/1/2004 1/1/2005 1/1/2006
4 Net flows from International Investors in decline (EUR m.)
7500
5500 5200 5100 5000
2500
981
19xx0 19xx 19xx20xx20xx 20xx 20xx Today
-1175
-2500
-3590
-5000 2005 2006 2007 2008 2009 2010*
*Jan-Oct 2010
5 Average traded daily value (EUR m.) heading south since 2007
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500 480
400 343 317 300
19xx 19xx 19xx20xx20xx 20xx 20xx Today 205 204 200 165 148 140 135 101 100
0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*
*Jan-mid. Nov 2010
6 Spreads of 10-Year GGB vs. the German BUND reach record highs in 2010…
1200
1000 959
895 800
600
19xx 19xx 19xx20xx20xx 20xx 20xx Today
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147
0 20/11/2009 20/1/2010 20/3/2010 20/5/2010 20/7/2010 20/9/2010 20/11/2010
7 …so do the Credit Default Swaps (5-Year)
1200 1128
1005 1000
800
600 689
19xx 19xx 19xx20xx20xx 20xx 20xx Today
400
282
200
0 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10
8 The austerity measures drive unemployment (%) higher…
14.0
12.2 12.0
10.0
8.0 8.0 19xx 19xx 19xx20xx20xx 20xx 20xx Today 6.0
4.0
2.0 Jan.08 Apr.08 Jul.08 Oct.08 Jan.09 Apr.09 Jul.09 Oct.09 Jan.10 Apr.10 Jul.10
9 …and pressure consumer sentiment at low levels (units)
0.0
-10.0 -9.6 -11.2 -20.0
-30.0
-40.0 -39.9
-50.019xx 19xx 19xx20xx20xx 20xx 20xx Today
-61.3 -60.0
-70.0
-80.0 Jan.08 Apr.08 Jul.08 Oct.08 Jan.09 Apr.09 Jul.09 Oct.09 Jan.10 Apr.10 Jul.10
Greece EU27
10 The austerity measures also impact corporate profitability
2010f EPS Downgrades since June 2009*
-4.77% EPS Downgrade Jun.09 - Jan.10
EPS -43.60% Downgrade Jan.10 - Jun.10 19xx 19xx 19xx20xx20xx 20xx 20xx Today
-7.45% EPS Downgrade Jun.10 - Nov.10
*Factset
11 In this challenging environment the characteristics to look at…
Strong Management
Strong Promising Balance Sheet Business & Cash Flow Model
19xx 19xx 19xx20xx20xx 20xx 20xx Today
Income Well Stream from Diversified Abroad Product Mix
12 International Sales as % of Total for Selected Companies* Listed in the ATHEX
100% 95% 90% 90%
80% 75% 75%
60%
50%
40%19xx 19xx 19xx20xx20xx 20xx 20xx Today
20%
0% Frigoglass Coca Cola Hellenic Intralot Mytilineos Titan Cement Folli Follie
*Group FY09 figures
13 ATHEX General Index vs. Performance of Selected Companies
2,350
2,150
1,950
1,750
1,550
1,35019xx 19xx 19xx20xx20xx 20xx 20xx Today
1,150
950
750
ATHEX GI TITAN MYTILINEOS INTRALOT FRIGOGLASS FOLLI-FOLLIE Coca Cola Hellenic
14 The focus remains on Macros and the Banking Sector
1900.0 Delays in the consolidation 1853.6 of the banking sector MoU - Austerity Measures 1800.0 & Structural Reforms 1769.9
1700.0
1600.0
19xx 19xx 19xx20xx20xx 20xx 20xx Today
1500.0 1436.7
1400.0 Banks Stress Tests Vote of confidence of intl. 1403.9 markets to reforms & success of NBG’s capital raising 1300.0 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10
15 The Greek Banking system although has displayed significant strength…
July 2010 – Stress Tests by CEBS
Adverse scenario + sovereign Adverse shock (23.1% haircut on 5- scenario year GGBs) 2009 2011 2011 TIER 1 National Bank of 11.3% 9.6% 7.4% PASS Greece Alpha Bank 11.6% 10.9% 8.2% PASS 1919xxxx 19xx19xx 19 19xxxx 20xx20xx 20xx20xx 20 20xxxx 20xx20xx TodayToday EFG Eurobank 11.2% 10.2% 8.2% PASS Piraeus Bank 9.1% 8.3% 6.0% PASS ATE Bank 8.4% 8.9% 4.4% FAIL Hellenic Postbank 17.1% 15.0% 8.4% PASS Bank of Cyprus 10.5% 9.4% 8.0% PASS Marfin Popular Bank 9.4% 8.5% 7.1% PASS
16 …has embarked to substantial recapitalization efforts
Rights Issue Convertible Bond Other
National Bank of c.EUR 1000m - sale of Greece EUR 631m / concluded EUR 1184m / concluded c20% of Finansbank / H1:11
Piraeus Bank EUR 800m / Q1:11 up to EUR 250m / H1:11
Bank1919xxxx of Cyprus19xx19xx EUR19 19xxxx 345m / concluded20xx20xx 20xx20xx 20 20xxxx 20xx20xx TodayToday
Marfin Popular Bank EUR 488.6m / Q1:11 up to EUR 660m / H1:11
ATEbank TBA c.EUR1000m / Q1:11
17 A well capitalized Banking Sector along with an improved sentiment on the economy could produce significant opportunities S&P 500 Financials
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160 19xx 19xx 19xx20xx20xx 20xx 20xx Today 140
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60 6/2/2009 6/5/2009 6/8/2009 6/11/2009 6/2/2010 6/5/2010 6/8/2010 6/11/2010
18 Disclaimer
Axia Ventures Group Limited, which is responsible for issuing this marketing document, (“Axia”) is incorporated in Cyprus and is authorised and regulated by the Cyprus Securities and Exchange Commission. Axia is allowed to provide investment services in the United Kingdom and in Greece as well pursuant to its permissions under the Markets in Financial Instruments Directive and may also provide similar services in the United States.
All statements of opinion contained in this marketing document, all views expressed and all projections, forecasts or statements relating to expectations regarding future events or the possible future performance of Axia represent Axia’s own assessment based on information available to it as at the date of this document.
No representation is made or warranty given as to the accuracy, completeness, achievability or reasonableness of any such projections, views, statements, or forecasts. The projections, views, statements and forecasts herein are based upon various assumptions and estimates, which Axia considers to be reasonable assumptions and estimates, which involve significant elements of subjective judgement and analysis and which are subject to uncertainties and contingencies; actual results could differ materially from those set forth in any such projections, views, statements and forecasts.
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