Local and foreign financial analysts are particularly optimistic about the course of Greek listed companies’ profits for 2006 and 2007, arguing that the average rise in earnings this year will reach record heights, exceeding 30 percent. The force behind this rise is considered to comprise blue chips and especially banks. The stock market desks of National Bank of Greece (NBG), P&K, Marfin, Piraeus Bank and Proton as well as the JCF international analysis group all suggest that this year will be much better than 2005 as far as the net after-tax earnings of FTSE-20 stocks are concerned. On average they expect a 45 percent rise in those earnings for these stocks. They also anticipate that next year, despite the decline in the profit growth rate, a 20 percent rise will be recorded. This illustrates the momentum of local stocks and improves their indices compared with rival companies abroad. These amazing rates are attributed to the increase in operating earnings (EBITDA) of listed firms. Note here that a few weeks ago the stocks of Intracom Holdings and Duty Free Shops were substituted by those of Intralot and Postal Savings Bank in the FTSE-20 index. The new entrants enjoy considerable profits and rise prospects, raising the blue chip average. Banks Greece’s biggest lender, NBG, is forecast to see profits exceed 1 billion euros this year. This is assisted by the sale of its US subsidiary, while the incorporation of Finansbank next year will raise profits considerably, higher than the average expected rise rate. This growth is significantly improving the price-per-earnings (P/E) ratio of the stock, justifying the management’s estimate that it is possible to reach 20 billion euros in capitalization almost immediately. That would also translate into an instant rise in the Greek stock index. Other banks will also see a substantial rise in earnings, with Alpha and Eurobank estimating their 2007 profits will top 730 million euros. However, stock market sources believe that the limiting of spreads in interest rates and the gradual reduction of consumer and mortgage credit margins will lead to a significant drop in the growth rate of profits. Analysts are also very optimistic about the course of OTE telecom; they suggest that the company will enjoy healthy profits both this year and next. They actually foresee profits near 500 million euros for 2006 and at about 600 million euros in 2007. Regarding Cosmote, analysts do not include Germanos in their estimates about the OTE subsidiary, as with Germanos being an «independent» company it is normal it should show a significant decline in earnings due to the lack of its turnover from Vodafone and TIM sales. Cosmote, on the other hand, even without including Germanos, continues to show its strong growth with results set to exceed 400 million in 2007. Nevertheless, analysts are split about the course of Hellenic Petroleum’s profits, as they will depend on the level of oil prices. Many experts believe that last year’s improvement in refining margins cannot be repeated, so that a decline in figures is certain. Finally, Intracom is going to see a significant drop in earnings for 2006, although a rebound is expected for next year. Yet the fact that the stock is no longer part of the FTSE-20 index means that its significance has diminished.