GIG Economic Bulletin – March 28, 2022

Record bids are expected for the Attiki Odos highway concession as the tender proceeds to the next stage, while crucial deadlines are approaching on strategic deals for northern Greek ports.

Economic BulletinInsights
Greece’s privatisation fund HRADF launched the tender for a 25-year concession of Attiki Odos last week – the ring road of Athens – attracting the interest of more than a dozen leading international and domestic players. On the real estate front, apartment prices increased between 6.9% and 7.4% in 2021.

Macro

A week after upgrading Greek debt, ratings agency DBRS has adjusted its growth forecast for 2022 to 4.3% (from 4.4%) and for 2023 to 3.4% (from 3.1%), reflecting the impact of the continuing war in Ukraine.

Representatives of Scope Ratings, Fitch and DBRS told the Money Review conference that despite the uncertain times, Greece can achieve investment grade in 2023.

The trade deficit widened by €1.6 billion in January compared to the same month in 2021, reaching €2 billion according to the Bank of Greece (BoG). Exports increased by 35% at current prices, while imports increased by 58%.

According to the Ergani labour registry, net employment flows in the private sector in February 2022 were positive by 15,189 employment positions. The balance for the first two months of the year is negative by 40,186 positions.

Retail sales were up by 5.1% Y-o-Y in January, but fell by 31.6% compared to December according to the Hellenic Statistical Authority (ELSTAT). Turnover for the month came to €2.32 billion.

Energy

Greece could enter into long-term power purchasing agreements for Bulgarian nuclear power, strengthening energy ties between the two countries. The prospect was discussed at the inauguration of the IGB gas pipeline which will commence commercial operations in September.

Bulgarian Prime Minister Kiril Petkov and Greek Energy Minister Kostas Skrekas visit the IGB project in Komotini. Copyright: Hellenic Ministry of Environment and Energy

Greek Prime Minister Kyriakos Mitsotakis announced a special 90% levy on the windfall profits of electricity providers which will be used to fund support measures for consumers affected by high energy prices.

Infrastructure

Thessaloniki Port Authority reported an 8.5% increase in income in the first nine months of 2021, bringing in €57.1 million compared to €52.7 million for the same period in 2020. The €150-million extension of Pier 6 is expected to generate annual income in excess of €230 million.

Piraeus Port Authority said in a statement that it is committed to implementing its investment plans, taking into account any adaptations required by the Greek courts and its agreement with the Greek state.

The deadline for binding offers on 67% of Alexandroupolis Port Authority is set for May 5, while the deadline for the Port of Igoumenitsa is June 30. HRADF is currently assessing the only binding offer submitted for the concession on Kavala Commercial Port.

Six potential bidders have emerged in the second stage of the tender for the concession on the 470-berth Aretsou Marina near Thessaloniki.

Fifteen potential bidders have submitted expressions of interest in the tender for the 25-year Attiki Odos concession. The move signals renewed interest from leading international players in the Hellenic market with names including Spain’s Albertis, Portugal’s Brisa, and the U.S.’ DIG Capital Partners. Bids are expected to exceed €2 billion.

Real Estate

Prices for new apartments shot up by 7.4% in 2021, compared to a 4.9% increase in 2020 according to the BoG. For older apartments, the increase was 6.9% in 2021 compared to 4.2% in 2020.

Prodea Investments reported €175 million of operating profits in 2021 compared to €63 million in 2020. The group’s net asset value increased to €1,396 million, from €1,367 million at the end of 2020.

Tourism

A strong rebound in Q3 2021 allowed Aegean Airlines to contain operating losses before tax for the year to €72.5 million, compared to losses of €296.8 million in 2020.

Low-cost airline Volotea will be adding four new European routes to Athens to its schedules this summer season.

Banks

Axia Research has maintained its “buy” rating for Greek banks following their annual results, noting the progress in meeting NPE reduction targets.

Alpha Bank has concluded the sale of the Orbit portfolio of unsecured retail banking loans with a book value of €1.3 billion to Hoist Finance AB.

Stock Market

The ASE general index dropped -2.29% on a weekly basis to close Thursday at 843.11 points before Friday’s national holiday, as the continuing war in Ukraine ended a two-week rebound. The index has lost -5.44% in the month-to-date and -5.62% since the start of the year.

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