Greetings! Once again, today’s news revolves around the opposition. It was quite an eventful weekend, with SYRIZA showcasing its usual antics, and PASOK appearing to mirror SYRIZA’s tactics. PASOK seems to have transformed into a party driven by mechanisms and a tight-knit group of insiders whose main goal seems to be holding onto their positions. Now, don’t tell me that the leader, Nikos, who has been struggling between 12%-14% since 2020, will suddenly pull off a miracle after five years of Mitsotakis’ governance, with ND losing 10 points in the European elections and SYRIZA dropping from 32% to 7%. The reality is that PASOK might gain a couple of points, but it will take time to assess its real momentum. One can’t help but wonder why this group of romantics (and some eccentric individuals), excluding the power-hungry ones, haven’t realized that their strategy isn’t working anymore. It reminds me of numerous failed attempts in the media, where once-great newspapers were revived but couldn’t recapture their audience. Anyway, those who vote decide in a party, and since they want Androulakis, even by majority, he’s the leader—no more grumbling and questioning—that’s PASOK, good night and good morning. As for Doukas, we wish him all the best, all the best wishes for the wedding this coming weekend. And as Melissanidis once said about Christodoulopoulos when he left AEK… Lazarus rose once, meaning, miracles don’t happen every day.
Where to now…
But the real highlights of the weekend weren’t in PASOK, but in SYRIZA, where the reality show with the candidate up for elimination—and eventually eviction—Kassellakis, unfolded dramatically in the second basement of a hotel in Metaxourgeio. Like in a thriller match, literally at the last minute, a former SYRIZA minister from Laconia (Arachovitis) and a certain Fotini Pantiora, a parliamentary candidate and coordinator of the party’s Civil Protection department (oops), appeared and quite literally “set the field on fire” by reaching 148 members on the Central Committee, thus forming the majority to boot poor Stefanos out. And goodbye to the glamor, the live broadcasts (by the way, Ms. Mendoni, what happened with the inspections of the illegal pools in Spetses?), Tyler’s gyms, and the morning appearances on Giorgaras Liagas’ and little Katerina’s shows.
Parrot green, canary yellow…
And it’s not like I saw any masses weeping for Stefanos outside Metaxourgeio. I saw one lady in a parrot-green shawl over a white outfit, flipping off people in support of him, and another in a canary-yellow ensemble, hurling curses at the SYRIZA hierarchy. The online warfare, as usual, was handled by the lyricist and Pen Dalaoura, Aris S., and Evangelos (just to make it sound more pompous) Antonaros. The other Evangelos, Admiral Apostolakis, is missing in action because the prosecutor is now after him regarding the half-billion-dollar junk planes SYRIZA bought, and we’re still waiting for them to fly, nine years later. He’s probably thinking, “better keep a low profile.” Tzakri, the priestess of politics, is standing firm, but I didn’t see the other one, Petros Pappas, anywhere—he’s likely starting to figure out where things are heading. Now, of course, there’s a major loss among Kasselakis’ supporters: Giorgos Kyrtsos, who informed us he voted in PASOK’s internal elections. Alas, how did that party slip his radar? Giorgos is a guarantee—wherever you see him heading, run the other way.
Merry Christmas…
Now, whether the process of kicking Stefanos out was all that democratic—don’t ask what’s obvious. These people never hid their ideological roots. But the moment Adonis, the master of such things, took up his public defense, you understand that we’ve entered the right dimension of the problem. Yesterday, I asked my source what’s going to happen with the Conference, when it will be held, and why Kasselakis keeps bringing it up, saying “we’ll talk there.” My source responded, “It’s more likely for Trump to take part in that Conference than Kasselakis. Besides, on Saturday night, when we wrapped things up, we wished each other Merry Christmas.” I didn’t fully get what they meant, but I doubt the Conference will happen—maybe even the elections before the new year?
Tsipras, Pappas, Polakis
And let’s not forget the three key players in the final takedown of poor S.K. the day before yesterday. Polakis didn’t show up at the scene of the crime but sent a dozen of his own to do the dirty work. So, he helped—indirectly, but unmistakably—solidifying his role. Nikos showed up and voted for the ousting, but he came alone, without his people (assuming he still has any). As for the natural leader, Alexis, well, he had business in Budapest and didn’t have time to get involved. Nice, right?
Touring (former) prime ministers
The two exes, Karamanlis and Samaras, may not have gone to the Rigillis for the 50th anniversary of the New Democracy, but they are going to business awards and are now marching as a duo – possibly going to weddings in the next few years as well. I don’t know if they will be presenting awards at the Chamber of Commerce event (like at the Oscars or Golden Globes), but they will attend, along with government ministers (Theodoricakos, Dimas, etc.). If I understand correctly from the program, however, the event will be quite folkloric, with a surprise dance at the beginning (not the two former ones) and the great hits of Eleni Tsaligopoulou.
Fessas closes the deal for ACS
Over to market news starting from the Quest group of Th. Fessas. The processes are complete, the discussions have matured and we are now in the period where we are waiting to hear the good news about ACS. The DPD deal has progressed and we are now very close to the time of the announcements. DPD has offices in Greece but is serviced by ACS, is part of the Geopost group, and controls several courier companies with operations in over 50 countries. As you know in these deals you can’t say with certainty today or tomorrow, but the bottom line is that we are literally in the last mile and this is a good deal from what Th. Fessas.
Countdown at Attiki Bank’s AMK
And continuing along the same lines, with a business that’s ripe for the picking, the word is everything’s set this morning for the approval of the prospectus for the new Bank of Attica’s capital increase. The Securities and Exchange Commission has been on standby since Friday, so if the paperwork’s in order, we might even see the green light before the trading session kicks off.
Alumina prices and Metlen
According to CNBC, prices for November alumina futures on the Shanghai Derivatives Exchange jumped 6.4% on Friday to $655.20 a tonne (an all-time high since the contract began trading) on concerns over problems with bauxite supplies from Guinea in an already tight market. Guinea is the second largest producer of bauxite after Australia with Chinese traders who spoke to CNBC saying it now only takes a spark to push up spot alumina prices on the Chinese market, as it is not known why customs stopped exports by GAC which last year exported 14.1 billion tonnes of alumina to international markets. The bauxite supply problems occurred at a time when the Chinese are steadily increasing alumina production and so last Thursday, the spot alumina price hit its highest point since 2012. This is why key aluminum stocks such as Alcoa on the NYSE closed Friday with a 4.51% gain, Norsk Hydro with +3.09%, Century Aluminum on the Nasdaq with +5.04%, and so on. How would Metlen react if it were on the FTSE 100?
Orcel-Psaltis
And because the discussion is about Metlen, it is worth noting that the success of the group’s ‘green’ senior bond issue was no surprise. Demand was extremely high as it exceeded EUR 2 billion, exceeding the original target by more than 4 times and allowing the Metilinaio group to raise an additional EUR 250 million on preferential terms. What is not known, however, is that this same issue was the signature issue of the Alpha Bank – UniCredit partnership in Greek corporate banking and, of course, the first result of Orcel’s visit to Athens and the dinner organized by Alpha Bank to introduce him to its top corporate clients. The Italian banker got his information from his friend of 20 years, Vassilis Psaltis, but it is no coincidence that Orcel’s interest turned to Evangelos Mytilineos. The Italian sought, during the dinner, to discuss in detail with the strong man of Metlen, one of the leading industrial and energy companies in Greece and abroad, and the results did not take long to come. With the Italians showing reflexes and high speed of implementation, Alpha Bank and UniCredit took on the role of underwriters and co-managers of the bond bid book, with Orcel and Psalti sending the message that “they mean business.”
Massive bond issuances by banks are on the way
Bank management meetings with IMF and ECB representatives have been successfully concluded. The Korean-born economist, Joong Shik Kang representing the IMF shared praise and asked for more information on the significant reduction of the Public Debt, while the representatives of Frankfurt and in particular the SRB (Single Resolution Board), pressed the management of the country’s systemic banks to take advantage of the good climate for the Greek economy to accelerate MREL bond issues to fully meet the minimum requirement for own funds and eligible liabilities (MREL). It was finally agreed that by June 2025, (rather than December as was the case) the 4 systemic banks will have covered the entire Minimum Requirement for Own Funds and Eligible Liabilities (MREL). This means that immediately after the US elections (5 November) and until the Christmas holidays, the banks will proceed with bond issuances of 2.5 billion euros. 2 billion to prove that they have as much capital on their balance sheets as they need, so that – in the event of a crisis – their recovery will not depend on public financial support, as the bondholders’ creditors will also contribute.
JP Morgan votes for PPC (at EUR 15)
With a gain of 2.02% PPC closed up and possibly the enthusiasm is related to JP Morgan, which we know considers the inclusion of the CEE in mature markets a negative development, reports (CEEMEA Mining & Utilities Anna Antonova, CFA AC) that should Greece move into the developed markets group, the bank’s analysis team expects 29 stocks to be eligible for inclusion in the FTSE Develop Market Index, including PPC, which may have positive flows of 2.3m dollars. Despite the technical factors, JP Morgan believes the developed market’s announcement will support PPC shares in the short term (in addition to the ongoing buyback program) and remains overweight with a target price of EUR15.
Cynergy’s discount
The capital increase of Cenergy was oversubscribed by about three times, successfully raising €200 million to fund the first phase of its investment in creating a new cable production unit in Baltimore, USA. The shares were ultimately priced at €9, significantly lower than the €9.86 ceiling set for the new shares issued, and at a discount compared to the stock’s trading price. The stock closed at €9.36 on Friday, and according to the announced schedule, settlement and crediting will occur by tomorrow, October 15 (the final deadline), followed by the announcement of the final allocation of the new shares. A day later, the shares will begin trading, so it will be interesting to see how the stock behaves on the market. The key point, however, is that the €200 million raised will not go into the pockets of the main shareholders but directly into the company itself. Net debt is reduced from €494 million to €294 million. This year’s adjusted EBITDA is expected to be between €245 million and €265 million, bringing the net debt-to-EBITDA ratio down to 1.2 or even lower. The company can now cover the financing needs of its new Maryland facility from its free cash flows, while the free float on the stock exchange has improved significantly by more than 10 percentage points.
Telekom, OTE and artificial intelligence
A clear indication of trends in telecommunications was given by Telekom, the parent company of OTE, at the Capital Markets Day held in Bonn. Tim Hottges, CEO of the multinational group, said that Telekom’s new growth plan is now starting, which is more data-driven, has a higher degree of automation, and makes more intensive use of artificial intelligence (AI). In Germany, Telekom has already moved in this direction with automated customer identification and documentation, as well as AI-based information requests, and as he said the number of complaints from customers has already been reduced by about two-thirds compared to 2020. This model will of course be implemented in all countries where the group has a presence, including Greece, something already announced by OTE CEO Kostas Nebis at the “CEO Talks” a few days ago.
Hellas Gold new targets
The mere fact that today Hellas Gold is organizing a press mission to Halkidiki to present the progress of the work at the Cassandra Mines is news. Things have changed there at Skouries and Stavros. The production capacity of the Mines has increased by 12%, the first 5G mine with fully automated control processes and full compliance with environmental requirements is being created at Olympiada, and the next big goal is to exploit the ores with value-added processing units.
It’s not only a drop in interest rates
In Europe, everyone thinks a new Euro rate cut this Thursday is a certainty. But there is another simultaneous process that began last March in which the European Central Bank is steadily shrinking its huge bond portfolio. The major central banks are rethinking how they provide liquidity to the financial system while reducing the size of their balance sheets. In the US, the Federal Reserve’s balance sheet shrank by $66 billion in September to $7.05 trillion, the lowest level since September 2020. As of April 2022, the Fed has shrunk its asset portfolio by $1.92 trillion. Simply put, the Fed has “taken back” 40% of the $4.80 trillion it funneled into the pandemic response. It is the first time in US history that the central bank has simultaneously reduced its balance sheet along with lowering dollar interest rates.
Investments in Intellectual Property are on the rise
In the U.S., investments in intellectual property account for about 8% of GDP. In Germany, while physical investments have shrunk this year by -6% (the largest decline among G7 countries), intangible investments have increased by more than 4% during the same period. The data shows that all major European economies invest around 4% of their national income in intellectual property rights, and this is accelerating. Economies are shifting. Instead of smokestacks and large properties, smart money seems to be gravitating toward intangible investments. Intellectual property continues to represent 22% of Germany’s investments, while in the U.S., it absorbs 36% of total investments.
