The mighty Alpha Bank, the crescendo on the board and ADMIE’s Ariadne

By | May 9, 2023

The Athens Stock Exchange has been going from good to better in recent sessions, having come quite close to the March highs. Investors see the gap between the top two parties widening in the polls and therefore political risk decreasing. They see foreign markets also at their highs despite so many risks, they see foreign analysts enthusiastic about Greek stocks and especially banks, they see excellent results, high dividends and prospects and yesterday they also saw excellent performance in the trade balance.

The first quarter saw a large reduction in the trade deficit by 19% as the value of exports in the same period increased by 17.8% to €13.71 billion. With the announcement of the data, the General Index continued its upward movement towards new daily maximums. Banks were also in the spotlight yesterday, as after strong results and revised targets from Piraeus Bank, the market ruled out a similar course from Alpha Bank, which announced first-quarter results after the close of trading.

And rightly so, as seen in the result, investors bet on the stock and sent it down to €1.20, as the earnings it posted were significantly higher than analyst estimates. Profit after tax was €111.2 million with an adjusted €162 million well above analysts’ median estimates of €83 million and €129 million, respectively.

The Return on Tangible Equity (ROTE) stood at 11.1%, while the doubtful loans portfolio was further reduced, reaching the ratio at 7.6%. The interest margin amounts to €423.6 million from €398.1 million in the last quarter of 2022.

CEO Vassilis Psaltis noted that “we are on a stable trajectory of sustainable growth and shareholder value creation. We remain firmly committed to resuming dividend payments to our shareholders beginning with earnings in 2023, subject to regulatory approval. In addition, our liquidity profile remains solid, as evidenced by the achievement of a Liquidity Coverage Ratio (LCR) of 164%, above the Eurozone average, and our decision to repay €4 billion of TLTRO financing early.”

It is recalled that Alpha Bank has been in the spotlight recently due to major updates from domestic and foreign banks. Among the houses that recently upgraded their rating on the bank is Morgan Stanley, which maintained its outperform recommendation with a price target of €1.44 from €1.37 in the base case, and €1.70 (from 1.67 euros) in the bullish scenario.

Among the stocks that stood out yesterday was the ADMIE stock, which has lagged far behind and for various reasons does not attract investor attention. Of course, the results of the last quarter improved and, at the same time, a large investment program is being implemented, without which the “story” of the energy transition cannot take shape in Greece. The reason for the quota increase is the evolution of the sale of 20% of Ariadni.

Ariadni is essentially the contractor who will implement on behalf of ADMIE the interconnection of Crete with Attica. Four are the suitors who go to the second phase of the contest for the sale of 20% of the total shares. The Macquarie Super Core infrastructure fund: the Phaethon Holdings consortium, GEK TERNA, Italy’s Terna SpA and StateGrid International Development Belgium (a subsidiary of China’s State Grid).

JP Morgan analysts see New Democracy very close to self-sufficiency in the runoff elections in July. In fact, as you observe, New Democracy will rule alone or in coalition with PASOK.

And it is that, as they observe, the policy that will be followed after the elections must maintain a line of continuity with the one followed until today, that is, support strong economic growth.

JP Morgan analysts estimate that the May 21 elections will not “remove” a government, as they will be held in an almost fully proportional system. Under the New Democracy policy, JP Morgan executives report that they will continue the reforms and major public spending programs facilitated by the EU Recovery Fund, which are expected to significantly increase the country’s GDP over the next five years. At the same time, there are likely to be some adjustments to capital gains taxes, but JP Morgan analysts do not expect major changes to the overall policy agenda.

Referring to the percentages of opinion polls, JP Morgan analysts point out that today’s center-right New Democracy leads steadily with 35%, against 29% for the leftist and populist -as it is characterized- SYRIZA. The center-left KINAL has around 10.5% and the far-left KKE 6.5%. Two other populist parties, the left-wing anti-European Mera25 and the right-wing Hellenic Solution, with around 4.5% each, could also enter parliament.

The average annual growth rate of the turnover of organized retail companies is 7.1%. Of the 53 active supermarket chains in our country with approximately 2,700 establishments, the first six, namely Sklavenitis, AB Vassilopoulos, Metro, Masoutis, Pente (Galaxias) and ANEDHK Kritikos, reached a total turnover of 8,460 million euros.

According to a relevant KPMG survey, this figure increases by 61% compared to 2017. Likewise, the debt to profitability ratio (Net Debt/EBITDA) shows a decrease, reaching 3.9 by 2021, which indicates that companies reach and improve their profitability in recent years.

Industry issues include uncertainty about the economy due to inflationary pressures, rising energy costs and increased demand for competitive supply chain strategy planning.

Beyond the expansion of large through acquisitions of smaller local chains, ESG investments and the shift of consumers to private label products, the new trend in retail is also the gradual emergence of AI processes in the industry. . In fact, this trend has begun to make its appearance, globally, in grocery retail businesses organized in the form of virtual and augmented reality, such as the metaverse, autonomous product delivery, partnerships, and business-to-business ecosystems.

The countdown to raising the US debt limit has begun. According to the US Treasury Secretary, failure to resolve the impasse in time could have catastrophic consequences and a constitutional crisis. The last time a similar confrontation between political parties came to a head was in 2011 and cost the US the AAA credit rating trophy.

Credit ratings agency Scope Ratings has put the US AA rating on review for possible downgrade. This is the last week that politicians in Washington have to agree to an increase in the debt ceiling. President Joe Biden will meet with the presidents of the House and Senate on Tuesday, but no deal is expected on May 9. “The last thing the United States needs is a manufactured crisis,” said the US president.

Most analysts believe that there will be a resolution in time, but the markets show that investors are not leaving things to chance. The cost of insuring US government debt default risk has already risen to the highest level since 2011, according to S&P Global Market Intelligence. The confrontation between Democrats and Republicans over the increase in the debt limit of $31.4 trillion. it’s been three months now with Biden calling for an unconditional cap increase and the Republicans who control the House of Representatives refusing unless there are cuts in tax spending to contain the budget deficit.

Cariad is one of the companies belonging to the group of the German automobile manufacturer Volkswagen (VOW3 XETRA). This is the group’s software division and its poor performance was the main reason for the dismissal of the group’s previous CEO, Herbert Diess, last September. Dice’s choice to rely entirely on the team’s own strength and not work with any of the major software companies to develop the software and electronics needed to transition the team’s cars into the new era proved unfortunate.

Delays in preparing the new software systems caused significant problems in the launch of the company’s new models, especially some of the extremely profitable Porsche and Audi. In addition to this, many of the company’s cars have problems with their software and owners are forced to take them to garages to have their software updated there, as updating via the Internet has proven impossible in many cases.

Eight months after assuming the position of CEO of the group, Oliver Blume, who has also retained the position of CEO of Porsche (P911 XETRA), seems to have made his decisions. If the information from the German newspaper Handelsblatt and Reuters and Bloomberg that relayed it has not been fully leaked, the appointment of Peter Bosch as CEO of Cariad will already have been officially announced by the time Black Box was published.

Until now, Bosch held the position of director of production at Bentley, one of the most luxurious brands in the group, and will also assume the financial direction of Cariad. According to information from the international press, Blume has decided to dismiss the entire Cariad board of directors, with the exception of the personnel director. Along with Bosch, Thomas Gunder and Sajad Khan are expected to serve on the board of directors.

Günter works at Cariad but was previously an executive at Porsche, and Kahn is currently the head of Porsche’s software division. Blume’s preference is not surprising: he obviously preferred to entrust the task of reorganizing such an important area of ​​the group to people he knows very well, having been his subordinates at Porsche.

In fact, according to Reuters sources, the change in Cariad’s leadership will also be accompanied by a change in strategic planning: Cariad will try to achieve the goal of timely and reliable development of the software that Volkswagen Group cars will use. with the help of external partners, abandoning Dice’s dream of autonomous development. If the changes at Cariad pay off quickly, they will strengthen Blume’s position and help the company’s stock as well. Otherwise, it’s not out of the question to see him go the way of Dis.


This material is provided for informational purposes only. In no case should it be taken as an offer, advice or solicitation to buy or sell the mentioned products. Although the information contained is based on sources believed to be reliable, it is not guaranteed to be complete or accurate and should not be relied on as such.

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