Greetings! So, from yesterday’s election results for the green ballot box, one can easily understand that Mitsotakis remains by far the luckiest prime minister of the post-dictatorship era, as every party that tries to…stir up trouble against him self-destructs. K.M. will therefore go to elections, whenever it’s time, with opponent in PASOK:
a) the current leader, Nikos, who has been floundering around 13%-14% for some years now, while SYRIZA has dropped from 32% (in 2019) to 8% today!
b) or Charis Doukas, who, from a triumphant mayor of Athens with 64,000 votes around this time last year, ended up fourth in PASOK’s internal elections for the 1st Athens district and barely scraped through to the second round because Geroulanos and Diamantopoulou annihilated each other.
We’ll find out who will win next Sunday, but I think you might as well start preparing the memorial service for the once glorious PASOK, because it seems the fuse has blown for good this time.
Androulakis?
The experts and pollsters, who I must admit had predicted the Nikos-Charis showdown, say the leader will comfortably prevail over the mayor, but I don’t know about that. What I can tell you is that it seems more logical for Androulakis to win…by the abstention of most of Anna and Pavlos’ voters, who will likely go for a Sunday stroll rather than to the ballot box.
Celebrations at M.M. (Maximos Mansion)
At the Maximos Mansion, they stayed up late watching TV, analyzing the PASOK electoral race amongst themselves, either by phone or on WhatsApp. For every second-round scenario, there was an analysis, but for the Androulakis-Doukas pair, I didn’t sense any…deep concern. People at M.M. commented that the mayor of Athens collapsed in Attica and 1st Athens district, finishing fourth, while Nikos Androulakis received almost the same number of votes as in 2021. In other words, M.M. concluded that PASOK remains a party of internal mechanisms. Also, as one person from the “morning coffee” told me, it’s clear that Diamantopoulou’s candidacy deprived Geroulanos of extremely crucial votes, which could have upset the balance. So, as the Anglo-Saxons say, the Androulakis-Doukas duo is “the devil you know.”
I’d add an old advertising slogan: “We know them, we trust them!”
And with Stefanos?
“Now we just need Stefanos to wrap up the show on the Left,” a well-known source from Maximos told me, and as it seems – hopefully, around Christmas time – we’ll have the double victory for K.M., with Nikos and Stefanos. The remaining opposition consists of Samaras, Karamanlis (in Rafina) when he’s not hungry, and of course, Aphrodite, who is slowly but systematically nibbling away at New Democracy’s space.
The mystery of the empty homes
The government is trying to find solutions to the housing issue and is carefully examining all the relevant data. One puzzling point was how, even though the country’s population is decreasing, the demand for housing is increasing. The answer came: while the population is decreasing, households are increasing due to divorces, single-parent families, etc. Another issue now is the number of vacant homes. According to data from the Independent Authority for Public Revenue (AADE), the number was estimated at 600,000 houses. However, the 2021 census data overturned this picture, showing 790,000 vacant homes, and we’re talking about vacant homes, not holiday or secondary homes. Now, at M.M., they are investigating why there is such a large discrepancy in the figures.
The Greek defending Commerzbank
The euro-banking dispute that erupted between Unicredit and Commerzbank is well-known. Unicredit’s moves took the Germans by surprise, who are not keen on losing control of their second-largest bank. The issue is serious for the Germans, with Handelsblatt commenting that if they don’t stop Unicredit’s advance, Chancellor Scholz could be politically exposed. One of the Germans’ moves was to place Bettina Orlop at the helm of Commerzbank. The other was to hire UBS, and specifically Stefanos Papapanayiotou, to organize Commerzbank’s defense against Andrea Orcel’s plans for Unicredit. UBS’s selection is far from random, as UBS’s head for the financial sector in Europe, Stefanos Papapanayiotou, has worked in London on Orcel’s team. The current CEO of Unicredit, from 2014 to 2018, was in London as the head of investment banking at the Swiss bank, with Papapanayiotou being a key member of his team. During those years, Orcel became Papapanayiotou’s professional mentor, as he managed a series of sensitive and challenging deals directly under his orders. Some colleagues even suggest that the solid professional cooperation between the two bankers was the springboard for Papapanayiotou’s rise in the UBS hierarchy after 2018 when Orcel left to start his own business. So, the Germans chose someone who knows exactly how Orcel thinks to counter the Italian attack on Commerzbank.
Cenergy and Attica Bank
The market is moving on from the National Bank’s placement and gearing up for two projects that carry significant weight: the capital increases of Attica Bank and Cenergy, both featuring public offering characteristics that will draw in liquidity totaling nearly 1 billion euros. Attica Bank is seeking 735 million euros, of which 672.1 million euros will come with preemptive rights for existing shareholders and cash contributions, and 62.9 million euros through the issuance of warrants. Cenergy, on the other hand, is looking to raise 200 million euros. The process will move quickly, as there is significant international interest, and the funds raised will be immediately utilized for the creation of a cable production unit in Baltimore, USA. Note that, simultaneously, the free float will also be expanded, as the main shareholder’s stake (controlled by the VIOHALCO group) will decrease from the current 80%. Tomorrow, the first of a series of major events for Cenergy Holdings will take place, titled “Connecting the World of Energy.” The meeting serves more as a prelude to the timing of the 200-million-euro share capital increase process, aimed (also) at expanding the “free float” by approximately 7% of the share capital. The central message of all the presentations will be that the group has already entered a new phase of rapid growth.
National Bank
Stock market insiders estimate that about 4 million shares will be the influx from passive mutual funds that will follow the change in the National Bank’s weighting in the FTSE, FTSE Russell, and MSCI indices after the HFSF’s divestment. It remains to be seen at what price they will choose to position themselves.
Starting today, the composition of the General Index on the Athens Stock Exchange is changing. First, because the free float increase will raise the National Bank’s weighting in the General Index, and second, because Bank of Cyprus is being added as the 61st company in the index’s composition, without any other share being removed. Regarding National Bank’s stock — which was the market’s catalyst last week — the +2.49% at 7.738 euros (with transactions of 10.79 million shares) on Friday creates the following scenario for short-term players. Buyers, mainly domestic, who bought at last Monday’s highs (up to 7.974 euros) are recording losses of 0.056 euros per share, while — primarily foreign investors — are registering gains of 0.188 euros per share at the updated final price of 7.55 euros.
Court date tomorrow
Tomorrow, Tuesday, 8/10, we have the first hearing in the case of Viva against SoftOne and Entersoft. H. Karonis continues his posts/complaints about “oligopolies,” “profiteering,” and companies “demanding ransom from payment service providers.” SoftOne and Entersoft are not commenting, and simply respond, “We’ll see you in court.” Meanwhile, sources from Viva claim that payment providers Nexi and NBG Pay will also follow, as there are complaints against them as well.
How the Attiki Odos transition succeeded
GEK TERNA, Ellaktor, and AVAX succeeded, from midnight Saturday to Sunday, in flawlessly transitioning the Attiki Odos to the new concessionaire. Senior officials from the new concession and operating company, Petros Souretis and Emmanouil Moustakas, as well as veterans like Vasilis Chalkias, the head of Attiki Odos operations from the start of the project until 2022, and his successor up until recently, Yiannis Lefas, were present early at the Attiki Odos Control Center. The anxiety, responsibility, and determination for everything to run “like a clock” dominated everyone’s minds, which is why the road’s transition was exemplary. Company executives even say that the change of guard, done in this manner and timing, is unprecedented in Europe. In many European countries where similar concession contracts expire, like in Portugal and Spain, the roadways revert to public control, and the states either reduce or even eliminate tolls, leading to chaotic conditions. In Greece, this scenario was avoided thanks to the bailout agreements, as the Greek state’s rights to concession projects were directly transferred to the Hellenic Republic Asset Development Fund (HRADF), and the revenues from the contract renewals were allocated to creditors to reduce public debt. If not for the bailout agreements, the state would now be looking for an operator, and the money would have gone to the national budget.
Most employees stayed on
The transition process was indeed very challenging, which is why both sides’ executives turned night into day over the last ten days to ensure that the Attiki Odos highway would pass smoothly to the new concessionaire right after the contract expired. Just before midnight, the Deputy Minister of Infrastructure, Nikos Tachiaos, appeared at the Attiki Odos Control Center, praising all three companies that collaborated in an exemplary manner to ensure a smooth transition. Reports suggest that most of the employees of Attikes Diadromes and Attiki Odos S.A. transitioned to the new concession under three-month contracts, ensuring the continuity of the highway without disruptions or problems, giving the new concessionaire all the necessary time.
End of subsidiary sales
Over 5,000 OTE employees participated last Thursday in an online event with the new CEO of the Group, Kostas Nebis, where the strategy for the coming years was presented. Among other things, he made it clear that, apart from Otesat Maritel and Telekom Romania Mobile in Romania, no other subsidiary sales are in the administration’s plans. This clarification likely came in response to previous rumors about a proposed sale of evalue, which were not confirmed. Regarding the Romanian subsidiary, the market feels that the process is dragging on once again. The potential buyer is West Network Invest, which includes Digi Romania and the Clever Media group. The sale is pending approval from the Romanian authorities, which had previously blocked the sale twice with different potential buyers. New developments are expected soon.
Valéry’s son in Gregolimano
Last Friday, the new wing of the Club Med Gregolimano hotel complex in Evia was inaugurated, a project costing a little over €30 million over the past two years. Attending the event was Henri Giscard d’Estaing, president of Club Méditerranée SA, a well-known figure not just in France but internationally, as he is the son of Valéry Giscard d’Estaing, who served as President of France from 1974 to 1981. Henri, who has a background in political and economic studies, started at Club Méditerranée SA in 1997 and has been president for almost two decades. In Greece, Club Med made its mark on Greek tourism in the ’70s and ’80s with locations in Corfu, Crete, Rhodes, and Halkidiki. Now, the only one remaining is in northern Evia, the Club Med Gregolimano. The resort now has over 1,000 beds and offers 400 seasonal jobs during the summer.
Jinny at the Athenian Club
Tomorrow, Jinny Yang, CEO and Chief Economist of ICBC Standard, arrives in Athens. Wealthy Chinese investors are growing and investing dynamically abroad. China is now considered a major player in financial markets, and its GDP in dollar terms is now comparable in size to the US. The country is facing a massive real estate crisis, to which the central bank has responded by significantly lowering interest rates and increasing spending. Since 70% of wealthy Chinese portfolios consist of real estate, investors are now reallocating much of their wealth to international markets, diversifying their portfolios, and buying in Europe. Two Chinese banks are currently operating in Greece: the Bank of China in the Athens Tower and the Industrial and Commercial Bank of China (ICBC) in central Athens. Tomorrow afternoon at the Athenian Club, Jinny Yang will present her perspective on Chinese investments in Greece through the two banks operating in Athens. According to sources, a change in the Chinese ambassador in Athens is also expected next month. Xiao Junzhen, who is leaving, had successfully opened major business deals in Greece.
The best…among the worst
The usual suspects interested in Avramar submitted their binding offers last Friday, and today the evaluation began. The outlook remains the same: The banks—since a closure is out of the question—will be forced to choose the best (among the worst) proposals. The loans, for the most part, will be written off. More news is expected, barring any surprises, by the end of the month.
London Shipping Club gathers shipowners in Athens
The crème de la crème of Greek shipping will attend the two-day conference today and tomorrow, organized by Professor Kostas Grammenos, chairman of the Center for Shipping, Trade and Finance, and the London Shipping Club, along with the Onassis Foundation and the Bayes Business School in London. The packed two-day program will feature speakers like George Prokopiou of Dynacom, of course, the president of the Union of Greek Shipowners Melina Travlou, N. Tsakos, H. Vafeias, and dozens of Greek and international shipowners who came to Athens specifically for the event, along with senior representatives of sponsors like Goldman Sachs, the Ath. Laskaridis Foundation, and others.
Can interest rates change economic developments?
Rick Rieder, Senior Managing Director at BlackRock, recently appeared on Bloomberg TV, stating his belief that the next moves by central banks regarding their key interest rates are unlikely to alter the course of economies. “Just as with the rise, so too with the fall,” the impact of interest rates on the real economy is minimal, according to Rieder. It mainly affects overleveraged households and businesses on the brink of survival. Western economies are largely dependent on services (consumption, tourism, entertainment), which are minimally affected by 0.25% or 0.5% interest rate changes. In the US, the market for interest rate futures currently indicates a higher likelihood of a quarter-point reduction (0.25%) in each of the next five meetings of the Federal Open Market Committee, from November through May of next year. The chances of another half-point cut in November, according to the Fed funds futures market, have fallen to less than 1%. The same goes for Europe. At the next ECB meeting on October 17, most expect a 0.25% rate cut. The slowdown in economic activity and the decline in inflation below the 2% target for the first time in three years are aligned with the Fed’s confidence in its own rate cut. Markets are now pricing in a 90% chance of a 0.25-point cut in Eurozone rates on October 17.