ECONOMY

Privatization schedule put on hold

A government plan for the further privatization of stakes in listed companies of the wider public sector seems to have been postponed until the second half of 2008. The current US-led credit crisis has had a direct effect on the privatization program, which is expected to bring the government this year some -1.6 billion. However, under the current conditions, the specific target looks excessively ambitious. The first available signs regarding the plan’s progress are all but encouraging. For instance, the target price set for the stock of Postal Savings Bank (PSB) as regards a new placement is 20 to 30 percent lower than the current price of the bank’s stock, largely reflecting the impact of the latest international credit crisis. Unofficially, a new placement for PSB is expected in the second half of the year, provided, of course, that both the market itself and the institution’s stock show great improvement. Nevertheless, PSB President and CEO Angelos Philippidis has recently stated that the state is determined to retain the majority stake in the bank. A similar state of affairs also applies for ATEbank. Even though a new placement by ATEbank was regarded as almost certain, the bank’s stock is currently being traded at far below -5.05, which was the stock’s price at its previous placement. The latest crisis in the money markets seems to have largely contributed to postponing a placement until a much later date of the Athens Water Supply and Sewer Company (EYDAP). In contrast, Attica Bank’s privatization plans do not seem to be facing any serious trouble, except for some gripe-provoking delays. For banks, a good source of drawing liquidity has been the title issuance market. Indicatively, up to few weeks before the global credit crisis broke out, Greek banks had drawn approximately -7.5 billion just from this source of liquidity, simply highlighting the dynamics of this specific market. It is widely believed that an improvement in the situation is likely to coincide with the end of the current credit crisis and a return to normal market conditions.