MSCI Greece rebalancing following bank recaps; effective at today’s close

 The market gained 0.5% last Friday, closing the week with gains of 7.7%. Performance of the banking sector was mixed, with three out of the four systemic banks closing lower (National Bank -1.0%, Piraeus Bank -1.0%, Eurobank -1.8%) and Alpha Bank recording gains of 2.0%. The banking index closed marginally higher (+0.1%, recording weekly gains of 15.5%). Transaction activity was elevated, at EUR311.8mn owing to the rebalancing of the FTSE all-world index following the recent Greek bank recaps. We would expect investors’ sentiment to remain positive, with relatively high trading volumes due to the rebalancing of the MSCI Greece Standard index (Piraeus Bank FIF change effective at today’s close).


Economy // Greek PM voices opinion that IMF be left out from Greece’s current program

On Sunday the FT hosted an article on Greece and in particular the Greek PM’s opinion on the IMF participation in the ESM program that was agreed this past summer. It appears that the Greek PM expressed his opinion that the fund has an “ unconstructive attitude on fiscal and financial issues” which is “puzzling” thus should remain out of the Greek program.  He added that he believed that following the recent years’ developments, Europe now has the institutional capacity to deal with these issues now, thus no longer requiring the IMF’s expertise. On the other hand, the article underscores the impasse between the fact that Germany values the fund’s know how in these matters and would insist that the Fund be onboard while on the other the fund is probably the strongest supporter of the idea of debt relief, which is well acknowledged by Greece.

OPAP // Expiration of term of Gambling Commission Chairman

The term of the Chairman of the Hellenic Gambling Commission expired this weekend. Since we have not seen any announcement regarding a potential extension of the Chairman's term, we presume the govt has decided to seek a replacement for Mr Stergiotis, the head of the Gambling regulator. Mr Stergiotis had replaced the previous Chairman in June 2015 but faced strong criticism particularly over his handling of the VLT regulatory framework, with the multiple regulatory restrictions introduced by the Commission leading OPAP to the decision of suspending the project. The Gambling Commission Chairman gets appointed by the Finance Minister and assumes the role after ratification by the relevant parliamentary committee. Assuming that the govt has indeed decided to seek a replacement, this would be a positive step towards a compromise on the VLT front. In this case, the faster the adoption of a more reasonable regulatory framework, the better both for OPAP and for the state coffers.

Politics // Meimarakis and Mitsotakis to compete in second ballot on January 10 for the leadership of main opposition party New Democracy

The elections for the leadership of the main opposition party New democracy took place yesterday. Although final results are not expected until today, press reports suggest that current leader Evangelos Meimarakis and ex-administrative reform minister Kyriakos Mitsotakis are to compete for the party’s leadership in a second ballot on January 10.

 Eurobank // Wellington participation

The group announced that at Dec 11 Wellington Management Group held 5.02% of total voting rights ex-HFSF rights, corresponding to 107.162.767 ordinary common shares, while at Dec 15 Wellington's participation ex-HFSF rights dropped again below 5%.

 
National Bank // To absorb deposits of Bank of Peloponese; deadline for offers for Finansbank ends today

According to an official announcement NBG will absorb deposits of Bank of Peloponese following the revocation of its license by the Bank of Greece. As of Dec 2014 Bank of Peloponese had total deposits of EUR 125mn and 66 employees, hence any impact will be minor for NBG. On a separate note according to press reports, NBG 's deadline for the submission of binding offers for Finansbank expires today and thus the group expects several offers from interested parties including Qatar National Bank and Garanti Bank. According to the same sources offers may be close to FB's BV, ie at EUR 3.2bn based on the current EUR/TRY exchange rate, or somewhat higher.

MSCI // MSCI Greece rebalancing following bank recaps; effective at today’s close

As a reminder, Piraeus Bank is being maintained in the MSCI Global Standard Index, with an increased Foreign Inclusion Factor (FIF) following the recent recap. More specifically, Piraeus Bank’s FIF changes to 0.75 from 0.35. The change will be implemented as of today’s close.

 
ΑSE // Changes in the composition of the ATHEX Indices

Following the completion of the bank recap process, the investability weight of National Bank in all ATHEX indices changes to 60%. The change will be effective as of Wednesday December 23rd, 2015.

ASE // HCMC to lift short selling ban on banks (press)

According to a press report in euro2day.gr, the Hellenic Capital Markets Commission is examining lifting the short selling ban on banks and a relevant decision is expected today. We remind that the ban on short selling of shares of credit institutions expires today.