The Greek market was up due to banking sector strength following a good set of results, OPAP on the back of analyst target price upgrades and PPC as a result of a smooth transition to the new management. Moreover, we note the strength of Intralot, Motor Oil and Intracom shares and the weakness of Cosmote and Hellenic Technodomiki shares.
Flows During the last five working days net outflows from domestic mutual funds that invest in Greek equities amounted to EUR5.89m and to EUR103.3m on a y-t-d basis. We remind that during 2004 there was EUR438.6m of net outflows. Since the start of 2005, trading volume has reached an average of EUR215.1m.
Companies From our Watch List most companies released interim results during the last five working days. We comment on the important ones below.
* Alpha Bank results were better than expected led by substantial core operating profit growth stemming from strong retail lending and moderate cost expansion.
* National Bank results were in line yet the outlook improved with the guidance given via the three-year business plan, suggesting an 11% CAGR in revenues and a 19% CAGR in pre-tax and minorities profits.
* EFG results had no surprises, albeit confirming the growth outlook ahead.
We maintain a positive view for all three banks on the back of credit expansion, favourable competitive environment and increased cost cutting awareness.
* OTE posted a poor set of numbers, yet details were encouraging in terms of cost restructuring efficiency, softening competitive pressures and streamlining working capital needs. It remains a top pick.
* PPC results were mixed with higher personnel expenses yet better cash flow. EBITDA margin outlook was better than expected. We maintain our positive view on the back of improved volume growth for 05 and preserved monopoly position.
* Titan results underlined the positive outlook ahead with the full year impact of the new plant in the US, growing emerging markets contribution and smooth transition to IFRS. We remain positive and set our target price at EUR32.
* Folli-Follie, strong like-for like growth was offset by weak margins, yet the outlook remains positive amid higher pricing, rapid penetration in China and improving brand awareness. We maintain an overweight rating with unchanged target price at EUR28.
* Germanos results were broadly in line, highlighting the ability to benefit from usage expansion in the Greek mobile market, high top line contribution of foreign operations amid margin dilution. We remain buyers.
Besides FY results there were important developments relating to credit expansion and PPC management.
* Bank of Greece released credit expansion data for December that exhibited an acceleration of retail lending growth from the previous month and further supported our sector call.
* The market was pleased by the quick appointment of a new CEO at PPC following the resignation of Stergios Nezis. On the other hand there will be some uncertainty until the new CEO presents himself to the investment community.
Our view Overall it was a good earnings season, justifying to some extend recent equities strength. On a company level non-banks like CC HBC, Titan and OTE come out stronger from the results and now appear as an equally good investment proposition with our preferred banking picks. Mid and small caps, were not as exciting and should be seen on a case-by-case basis. We liked the results of Jumbo, Motor Oil and we did not like the results of our preferred construction picks.
P&K Online is the Internet arm of P&K Securities, Athens. It is an online, web-based application enabling a large array of investment related operations to P&K Securities customers.
P&K Online was launched on Oct. 1999, being thus the first application of its kind in Greece. Since its launching, it is in the forefront of the evolution of such applications: It is the first site which enabled full access to the electronic trading platform of the Athens Stock Exchange, the 1st to enable trading on margin, it is the single Securities site which permits information on multiple type of accounts (e.g. cash, margin, under management, derivatives etc).
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