ECONOMY

UBS tips for Greek stocks

Foreign investors’ interest in stocks listed on the Athens Stock Exchange (ASE) began rising in early summer last year, targeting companies that stand to reap benefits from the hosting of the 2004 Olympic Games, says Stergios Souyioutzoglou, head of Greek stock analysts at UBS investment bank. He notes that apart from the Olympics, the upcoming general election, due by May at the latest, and the preparation this year of listed firms for the adoption of International Financial Reporting Standards as of 2005, are also likely to influence the performance of Greek stocks in 2004. Generally, he adds, there is confidence that Greek stocks will do well this year but «visibility» is more limited for 2005. UBS gives a «buy» recommendation for four of the 14 ASE-listed stocks that it monitors: electronics and phone retailer Germanos, Titan cement company and banks Alpha and Piraeus. Germanos’s main advantage is seen to be its activities outside Greece, particularly in Poland, where profitability is still low but prospects are good. Titan has recently restructured its Balkan operations and expects to improve profits from its activities in the USA. The end of Olympic projects is estimated to bring about a drop in demand of only 6-7 percent for the company. The two banks are seen continuing to benefit from a rise in lending and have more attractive valuations than other Greek peers. Overall, UBS believes that the Greek economy is facing favorable prospects in the medium term due to a series of factors, including a stronger immigration inflow from Balkan neighbors, which will benefit banks and mobile telephony firms in particular. UBS also sees the ASE being influenced by developments in the rest of Europe, where the rise in corporate profits is expected to slow down from an estimated 22 percent in 2003 to about 17 percent this year. European stock prices are forecast to rise about 10 percent.