Why Mytilene is going to London, the “use” for Piraeus and the “colpo grosso” of EpsilonNet – Economic Post – 2024-04-28 22:59:04

· Mytileneos’ move to list the stock on the London Stock Exchange is largely expected

· Citigroup (Europe) and Morgan Stanley acted as its advisors.

· This was confirmed by the group after the publication of the results.

· The group clearly aims to be eligible for inclusion in the FTSE indices and the marketability of the share will increase.

· This does not mean that he is leaving Athens. In other words, he will choose the path of dual listing.

· But it will also confirm its international character.

· Already the group employs more than 6,500 employees worldwide.

· It has a presence in over 40 countries, while in Britain it has already been present for over 10 years, building renewable energy, grid and energy storage projects.

… and the attitude of the analysts

· Morgan Stanley raises the target price for Mytilineos from the previous 43 euros to 46 euros, after the announcement of the listed company’s agreement with PPC.

· Mytilineos has the Midas touch, according to a report by Optima, giving a new target price to 49 euros, from 47 previously.

· A new, higher target price for the Mytilineos share, at 48.4 from 45.2 euros, is given by Eurobank Equities, maintaining the buy recommendation and the stock in its top picks from the board.

· Citi maintains a buy recommendation on Mytilineos stock with a target price of €46 after the first quarter results.

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What AXIA sees about Piraeus’ results

· AHIA expects Piraeus to show positive trends in the first quarter of 2024.

· After a strong set in Q4 2023, we expect it to continue its overall positive progress, it says.

· He expects profits at 247 million euros, higher than the average estimate of 240 million euros.

· It also sees a 2% drop in interest income, but its margin, NIM, will increase to 2.80% (from 2.77% in 4Q2023).

· AHIA sees the stock trading at 0.63x P/TE terms based on 2025 estimates, with a RoTE of 14.3%.

· This means an attractive multiplier for the stock, keeping the target price at €5.

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Cocoa prices, City traders and persistent inflation

· Who doesn’t love sweets…? We love them, so we get a little more upset.

· It is not enough that we see the prices of chocolate have skyrocketed due to cacao beans, Piraeus also came to tell us that the sugar trend is also on the rise.

· “Upward pressure on its price is likely as a result of adverse weather conditions, affecting production prospects,” he told us.

· In any case, we probably won’t get rid of inflationary pressures easily…

· And if we factor in the various “games” with the energy markets, we probably won’t see the Fed “pivot” anytime soon.

· And this is not good for markets.

· They want cheap money and with interest rates at 20+ year highs, the landscape will be difficult.

· And as our sources in the city tell us… a policy change by the ECB will have little importance and impact.

· The Fed has the upper hand.

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What’s up with mortgage rates?

· We did not understand something well in the Financial Stability report of the Bank of Greece.

· The Central Bank specifically writes: the increase in ECB interest rates gradually affected domestic bank interest rates.

· The average interest rate on existing loan balances to households increased by 227 basis points (February 2024: 6.2%, June 2022: 3.9%).

· Thus, interest expenditure as a percentage of household disposable income showed a significant increase for mortgages in 2023 due to rising interest rates, the BoE says.

· We, however, knew about the program to protect borrowers from increases in key ECB interest rates.

· The Bank of Greece also mentions it: “a positive development is the initiative of major banks to extend the reward program for consistent borrowers with a variable rate mortgage, providing them with temporary protection from increases in the ECB’s key interest rates”.

· Is it really true?

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The alliance for EpsilonNet…

· The market is “thirsty” for business developments. And EpsilonNet is now the talk of the town.

· It is not a small thing for a bank and a fund that manages 84 billion dollars to team up for you.

· The main shareholder, Ioannis Michos, who owns 55.42%, can only feel satisfied.

· After all, it was disputed a few months ago about the accounting. It is a vote of confidence for him.

· And for the minority, however, the proposal is at least decent.

· The proposers give 12 euros per share (the title is at 10.1 euros).

… but also another loss for the board

· In the market, the exit of EpsilonNet is a blow. In the context of losing a member of the IT industry.

· With a not inconsiderable footprint.

· Of course the rest will benefit, as those who want to have exposure to the sector will channel funds there.

· Also, a big beneficiary of EpsilonNet’s exit is National.

· Ethniki had acquired 7.5% of the company for 7.49 euros per share.

· It is evident that it is already recording large capital gains.