Utilities, telecoms in the spotlight
Analysts said stocks in the Greek utilities and telecommunications sectors were in the spotlight yesterday, as the government has already expressed policy plans for further privatizations and deregulation. «The focus is on state-controlled companies – OPAP, Post Savings Bank, OTE, PPC – that have been slated for further privatization,» said Piraeus Securities in a note. The government has said it wants to divest more of the state’s current 28 percent stake in OTE, eyeing the telecom group’s full privatization to make it more competitive and raise funds to pay down public debt, one of the highest in the eurozone at 104 percent of GDP this year. Failure to attract a strategic partner may see the government opt for more private placements of OTE shares. «The government will probably stick to its privatization plans because it is an element of its supply-side policy approach,» said Deutsche Bank economist Theodor Schonebeck. «I don’t believe they have any reason to deviate from their plans,» he added. «The government can point to strong economic expansion in the past and claim that growth was supported by the economic policies conducted by them already,» Schonebeck said. Electricity utility Public Power Corporation (PPC) may benefit from greater deregulation of tariffs and a resolution of its public service obligations (PSOs), which include supplying power to remote islands at lower prices and which cost the group hundreds of millions of euros annually. «What is pushing PPC higher are expectations that the new government will continue with what was promised before the elections – which are compensation for PSO costs and the lifting of restrictions on replacing old plants,» HSBC analyst Paris Mantzavras explained. In the bond market, the yield spread of benchmark 10-year Greek government paper over bunds stood at 33 basis points as the election outcome removed any uncertainty, giving the conservatives, who received a second mandate, a new but thinner majority in the Greek Parliament. (Reuters)
