GREECE The market recorded gains after a volatile session yesterday to finally close 1.1% higher, as buyers prevailed during the last hour of the trading session following ECB’s announcement on QE. Transaction activity stood a little higher compared to the previous sessions, amounting to c. EUR79mn. On the gainers’ board, PPC (+4.45%), CCH (+3.50%) and Intralot (+3.15%) were the top outperformers, while banking sector index posted gains of 1.4%. Politics // Last round of polls shows slight widening of Syriza’s lead Three polls published yesterday (GPO, Metron Analysis and Rass) show Syriza’s lead has further widened to 4.4%-6.0% from 3.6%-4.2% as per their previous surveys. The largest gap is reported by GPO, which shows Syriza polling at 32.5% from 30.4% previously. ND’s percentage has remained broadly stable at 26.5%. The percentage of undecided voters remains double digit (10%). Note that these percentages refer to the voting intention without allocating undecided votes. Interestingly, the GPO poll seems to predict a 8-party Parliament (more fragmented than the other polls), implying that the aggregate percentage of parties failing to reach the 3% threshold will be low. The lower the latter is, the higher the percentage of the votes required for an absolute majority will be. Economy // Greek bonds eligible for ECB QE program if Greece in program During the ECB press conference following the governing council’s meeting the central bank announced that it would be embarking on a EUR 60bn per month purchasing program of both public and private debt, starting March 2015 and extending up to September 2016. The purchases involve investment grade securities, but waivers are present for non-investment grade country’s under a program, which is the applicable case for Greece. In addition, the ECB’s president stated explicitly for Greece that post the July and August maturities of the bonds held in their SMP portfolio, there would be room freed up for new purchases given that the ECB is already at the 33% of the outstanding debt threshold exposure to Greece. Economy // IMF spokesman comments on Greece; expects the Fund to be “fully engaged” with whatever government is elected In a scheduled press briefing, the IMF spokesman Bill Murray commented yesterday that they don’t see Grexit as a possible outcome. When asked about which side will take the first step in the negotiations, he commented that they “fully expect to be engaged with whatever government is elected” but declined to comment on the potential outcome of Sunday’s general elections. In relation to the post-election procedure, according to a press report in capital.gr, the IMF representative in Athens will attempt a meeting with the new Govt and if that fails, the IMF’s stance will be similar to the Hungary case. That is, take a step back and wait for the Greek Govt to change its stance and request the commencement of the review process or request the termination of the program. According to the same source, the IMF will request the continuation of the negotiations and the conclusion of the sixth review, irrespective of the elections outcome. Banks // Press reports indicate that SSM has sent guidelines to Greek banks on liquidity management According to press this morning, the SSM has sent a memo to the domestic systemic banks with guidelines on managing their liquidity implying their exposure and the future evolution of it to Greek treasury bills. This comes after increased domestic debate during this pre-election period that involves a possible expansion of the Tbill program to accommodate funding requirements. Greek banks are also called upon to fill the void created by foreign investors not rolling-over their exposure upon maturity of short term papers. The article is suggesting that banks may be constrained on their capacity to increase their exposure to Greek Tbills. Economy // Finland may be open to a Greek debt maturity extension, rebuffs idea of debt forgiveness Finland’s PM stated that they would be open to a maturity extension of current Greek debt, when speaking at the WEF in Davos. The changes that they may be open to include possible conditions attached to the debt, but in no case would his country be open to a full-blown debt forgiveness.
Posted on: Fri, 23 Jan 2015 07:44:07 +0000