Greek grouching over OTE sale
Certain negative comments and grouching leveled over this past week’s sale of a 10.7 percent stake in the Hellenic Telecommunications Organization (OTE), seem to be entirely unjustified, considering the successful placement made by the Greek government. Despite the minimal discount offered on the price of the share (0.2 percent, compared to 10 percent in a 2002 placement), the sale was completed in just one hour and 15 minutes. It took only 30 minutes for demand to be oversubscribed, also sparking a number of reports that foreign investors were better informed about the deal than their Greek colleagues. Perhaps more important, however, is the course of OTE’s share: It was the first time in the history of OTE that while the placement was in progress, the price of its stock kept rising rather than simply adjusting to the placement price. Institutional investors bought OTE’s share at 22 euros or 22.50 euros, while the government’s placement price was 21.4 euros. This might mean that the price of OTE’s share is worth at least a little more than the above rates. Naturally, had OTE shares been sold last May, when the share was trading at 24 euros, the returns would have been even higher. But it is not possible for a government to keep a 52.2-million-share sale procedure open, waiting to sell at the best price. Besides, who is to know which period will be the best for the share? Investors rushed to buy OTE shares without a second thought, giving rise to positive comments even in The Financial Times, which traditionally has a rather critical stance toward Greek finances. In fact the paper went even further, saying that OTE’s successful sale of shares signaled certain changes in global markets with regard to telecom stocks, especially after the deterioration in the climate which followed the sale of 7.0 percent of France Telecom by the French government.
