Investment banks eye party favors
Foreign investment banks seem to be vying for the favor of the two main Greek political parties, the ruling conservative New Democracy (ND) and socialist PASOK, targeting the lucrative commission income from prospective further privatizations and other state business after Sunday’s election. To this end, they are using all means available, particularly reports on specific stocks which have acquired an indirect but clearly political tone lately. Morgan Stanley, which 10 days ago forecast a surge in the stock price of OTE telecom if ND wins and a rough landing if it doesn’t, is a typical example. Likewise, Goldman Sachs left all possibilities open depending on the electoral result. Separately, JPMorgan, a few days after the start of the pre-election period last month, suddenly doubled the target price of the Public Power Corporation (PPC) from 15 to 30 in the case of an ND win. Battle positions In essence, the foreign analysts are taking up battle positions, betting on the election result. For the time being, Citibank commands a dominant position as lead manager and adviser on most Greek government jobs. UBS is in second place and Credit Suisse First Boston in third. Morgan Stanley and Goldman Sachs take fourth and fifth positions respectively in this lucrative business which yields hundreds of millions of euros in commission income. JP Morgan, which competed with Citibank for first place until the day the scandal of the sale of overpriced bonds to Greek social security funds, in which it was indirectly involved, broke out in July, has since fallen far behind, to sixth position. The sequence in which the various contestants appear on the list is fluid. For instance, Deutsche Bank was top of the list in the 2000-2003 period, largely due to its 10 percent holding in EFG Eurobank, which it has since sold. «Analysts are a peculiar race of people. Don’t judge them by ordinary standards,» a foreign investment bank official told Kathimerini, commenting on recent reports. «In our bank, and I imagine the same applies to other houses, they have the freedom to write what they want,» he adds. Ruling party officials seem to agree with this view. «Don’t look for anything mysterious behind such reports. There is nothing. But if they believe that by making favorable forecasts for ND they gain ground for the future, they are mistaken,» said one official. «Besides, no one can know in advance our moves after September 16 if we win the elections – in the sense that no one is in a position to know whether we shall proceed to a further privatization of OTE telecom, as they seem to believe,» he adds. According to the latest opinion polls which were published before the two-week ban ahead of the poll came into force, an ND victory appears the most likely. «This is only an indication, but as we all know, it will not have an effect on the result,» said a government source.
