The endless popcorn of SYRIZA, the oligarchs and the “balance” of power, the mysteries of M.M., and the breaking of the duopoly by the Competition Commission

– Hello there! What a lovely weekend we just had—bright but chilly with the sun showing its teeth, and thankfully no rain (let’s see how long this lasts in November). And of course, there was plenty of popcorn and spectacle, whether it was at the Gazi live event where SYRIZA was convening, or at the historic Tavros (famous for the “Avriani” paper), which turned into a sort of cult-like September 3rd celebration, as Kasselakis’ new party was announced. A year and a bit after Kasselakis burst onto the political scene, SYRIZA has split into at least three factions, both in terms of voter percentages and its parliamentary group. The party that governed for five years and left power with 32% is now resorting to court, accusing its former leader of offshore companies. Personally, I’m not surprised at all by SYRIZA’s phenomenon and its downfall. From 2014 until today, we’ve consistently said the same things about this toxic political mix, and we still say them now. We never played ball with them, never winked at them, never compromised, unlike nearly all the media—except Alafouzos’—and the vast majority of oligarchs who either benefited from or made deals with them. This is a brief reflection now that SYRIZA is done with, in case some have forgotten, including a few current “residents of power” who have a knack for sleight of hand.

New party, MPs, and a scandal…

• Just so you know, the Kasselakis story isn’t over yet, or at least many powerful figures (like the ones I mentioned above) don’t see it that way, since Stefanos already has eight MPs in his pocket (though whether the pocket is really his, I’m not sure). With a bit of goodwill, that number could rise to ten or more, forming a significant parliamentary group capable of causing trouble for Mitsotakis. Because that’s the aim, as even the most naïve Greek understands: to create an unstable environment where the government is constantly tossed around until one fine morning we wake up to hear about a… shocking scandal blaring all day on the TV channels or elsewhere, and that will be the end. A scenario akin to Koskotas or Simpilidis, with a twist. As a powerful businessman recently remarked at a social event, ‘What are 8-9 MPs? Not that many to defect from a government, and even if half of them do, it gets the job done…’

Whose side are they on?

• When I mentioned “residents of power,” a source told me something dystopian happening at M.M., which is supposed to be there to work in favor of the government, to support it (which it frequently covers, in my view), and to fix any issues that arise daily. So if my source isn’t mistaken, suggesting that comments against the regional governor Hardalias are being fed from within M.M. because he sounded the alarm about the need for “urgent fortification of Attica” after the Valencia floods, then something is off. There seems to be a lot of “busybody-ism” going on inside, but frankly, the boss should handle this and not let it escalate, because we all know how this story ends.

The new ambassador in Athens

• The appointment of the successor to George Tsounis, who ends his term in late January, will be crucial following the U.S. elections. In Washington, there’s already talk of Republican Congressman Gus Bilirakis, a strong player in Florida who always gets elected comfortably. However, there’s a counter-argument that Bilirakis might secure a significant position in the House of Representatives, so he may stay in the U.S. Another name my source mentioned is Reince Priebus, former White House Chief of Staff, who raised substantial funds for Trump’s campaign. Unless, this time, they opt for a career diplomat from the U.S. State Department, depending on the new boss there.

Who will succeed “Gigi”?

• Given the overwhelming approval “Gigi” received during his hearing at the Transport Committee, the focus now shifts to who will succeed him at the helm of the region. The frontrunner seems to be Deputy Regional Governor Nana Aidona, but internal agreements within the party need to be sorted out, as there are other contenders as well. M.M. is monitoring the situation discreetly, but the main decisions will be made by “Gigi,” who will wrap up his term at the metro inauguration on November 30. Incidentally, during “Gigi’s” hearing, something interesting happened. The Left wanted to vote for him but chose to abstain after the insistence of SYRIZA MEP Kostas Arvanitis.

The Competition Commission on breaking the oil duopoly

• By the end of the week, the deadline for submitting opinions on the regulatory intervention planned by the Competition Commission for the oil market will conclude. This means the countdown begins for imposing rules in an effort to open up competition and address the imbalances and problems caused by the duopoly in the refining sector between Motor Oil and Hellenic Energy. Reports suggest that among the proposed regulations is encouraging the government to create storage facilities so that importing refined products for distribution to trading companies becomes easier. Currently, only the two refineries have such storage, making it practically impossible for a third party to import fuel. The question is whether the government has the stomach to make these investments (there’s money, thanks to the Recovery Fund) to put pressure on prices and make competition work effectively. This would be a genuine reform that the public would feel in their wallets…

The elephant in the room

• The nine-month results for the banking sector will be completed tomorrow with the Bank of Cyprus. A common feature of all third-quarter financial statements is the improvement in metrics, a reduction in non-performing loans, while the €5.5 billion target for credit expansion this year was easily met, thanks to TERNA taking out €3.2 billion in loans. Next year, loans from the Resilience and Recovery Fund are coming, as well as the housing loans from “My Home II.” Bank stocks are trading at around 5.5 times earnings, with the Banking Index on the Stock Exchange up 15.87% since the start of the year. Everything looks good, except for the… elephant in the room: the very small number of companies that meet the criteria for bank financing. This is more clearly seen in Eurobank’s results. On page 8 of their presentation, there’s a table showing nine-month performance with and without the Greek Bank. On the bottom line of this table, which shows net profits, the increase for Eurobank is 1%, while for the group (Eurobank plus Greek Bank), it’s 15.8%. If a formula isn’t found to restructure loans to “green” companies and increase the number of bankable enterprises, this issue won’t take long to escalate.

Return to Reality for Attica Bank

• On Wednesday, November 13, 359,469,360 new shares resulting from the capital increase will be listed for trading. The acquisition cost of these shares is €1.84, while the current share price is around €6.2 on the stock exchange. On December 4, the new shares from the exercise of warrants will begin trading. Each warrant entitles the holder to purchase 3.5 new common nominal shares at a price of €0.05 per share. Simply put, those who participated in the capital increase process with cash and warrants acquire the new shares at an average cost of €0.45. It is evident that the current price of €6.2 won’t hold for long on the board, even though the number of Attica Bank shares currently available for free trading is extremely small, only about 9.9 million shares.

Alpha Bank: Cautious Approach to Increasing Dividend Policy

• The financial performance and momentum recorded by Alpha Bank in the first nine months of 2024 give shareholders every reason to expect an upward revision in its dividend policy. However, during the Q3 2024 results call, the bank’s management made it clear that they are not in a rush to raise their forecasts before concluding discussions with regulatory authorities, showing seriousness and credibility towards the institutions. “Subject to regulatory approvals, we expect to distribute more than 30% of our current market capitalization in dividends while still having excess capital exceeding 40% of our current market capitalization by the end of the three-year period compared to our targets,” emphasized the CEO of Alpha Bank Group, Vassilis Psaltis. He added: “We approach this year’s dividend target with ease and confidence, and we are increasing our ability to exceed the goal of total distributions amounting to €1.1 billion to our shareholders over the three-year period 2024-2026.” According to analysts, even after the accelerated repayment of deferred tax credits (DTCs), Alpha Bank has the capacity to make higher dividend payouts in the coming years without needing new issuances under the MREL targets. The bank has managed to strengthen its CET1 ratio upfront, achieve its capital and MREL targets 15 months ahead of schedule, accelerate further reduction of NPEs, and demonstrate enhanced, sustainable profitability. Notably, it is the only Greek bank that maintains the same level of capital buffers as European banks relative to capital ratios.

TITAN: €18 Million Spent for NYSE Listing

• The management of TITAN Group has spent €18 million this year preparing Titan America’s entry into the New York Stock Exchange. According to financial statements, the management spent €10 million in the first half and €8 million in the third quarter. This indicates that the IPO of Titan America is imminent, with January being a likely month. In addition to capital gains and raising funds, the TITAN Group is feverishly preparing to meet the significant demand for cement in three major regions requiring reconstruction: the Middle East, Ukraine, and areas in the U.S. affected by major natural disasters. The TITAN Group achieved record performance in the first nine months of this year, and all indications suggest that the upward trend in results will continue into next year.

The Council of State Hearing on Hellenic Defense Systems

• Today at 09:30, the Council of State will hear the request for interim measures filed by ONEX, led by Panos Xenokostas, to prevent the signing of an agreement creating a joint venture between Hellenic Defense Systems (EAS) and the Czech defense group MSM GROUP. ONEX seeks to halt the signing of the agreement at least until December 3, the date when the main application for annulment of the agreement will be heard by the 4th Chamber of the Council of State. Other information from the opposing side to ONEX indicates that the matter has been settled by a General Assembly decision and that the agreement has been signed, something contested by Xenokostas’ side. ONEX disputes the tender process and denounces the terms of the alliance as being unfairly biased in favor of the Czechs and against Greek interests. On the other hand, EAS, with the participation of the main shareholder—the Ministry of Finance—and the Supervising Ministry of National Defense, believes that the terms of the tender conducted by Deloitte resulted in three candidates (Americans, Dutch, and Czechs), leading to a highly advantageous agreement that ensures the sustainability of EAS.

Police Officers, Firefighters, and Bank Employees Against Tsakloglou

• And since we opened the topic of the Council of State (CoS), it should be noted that the Tsakloglou law on the operation and taxation of contributions and benefits of Professional Insurance Funds has come under the Council’s scrutiny. As of yesterday, the “Hellenic Association of Professional Insurance Funds” (ELETEA), the “Professional Insurance Fund for Police Officers, Firefighters, and Coast Guard,” the “Professional Insurance Fund of the Ministry of Finance,” the “Professional Insurance Fund for Economists,” the “Alpha Bank Employees Association,” and the “Eurobank Employees Union” have all submitted the first Annulment Applications to the 1st Chamber of the Council of State against the decisions and circulars issued by the Deputy Minister of Labor and Social Security. Reports suggest there will be additional initiatives to legally challenge the Ministry of Finance’s circulars concerning the tax treatment of contributions and benefits of Professional Insurance Funds (TEA). Law 5078/2023 appears to have caused significant (administrative and financial) issues for the TEAs, contrary to European practices. The management of large Greek enterprises is halting the process of establishing TEAs in Greece due to the abolition of key tax advantages and the legal uncertainty created by specific provisions of the law. As a result, all institutional representatives of the Professional Insurance ecosystem have undertaken a series of legal actions and appeals against the law passed by Parliament.

A Conference with Many Notable Absences

• The return of Trump to Capitol Hill dramatically changes the dynamics of the so-called “energy transition.” “Green energy” requires resources and time—especially to solve the storage issue—that Europe currently lacks, and neither America, China, nor India plans to provide. Europe will shift its focus to defense and boosting the competitiveness of its struggling economy. This new reality is clearly reflected at the United Nations Climate Change Conference (COP29), starting today in Baku, Azerbaijan. Despite high-level representation from Greece (led by Prime Minister Kyriakos Mitsotakis, with participation from politicians, scientists, and top executives of leading Greek energy companies such as TERNA, PPC, AKTOR, Copelouzos Group, TITAN, HelleniQ Energy, Motor Oil, etc.), this year’s international climate conference will see much lower attendance and many significant absences compared to last year’s talks in Dubai. This year, European Commission President Ursula von der Leyen will not be present. The EU will be represented by European Council President Charles Michel, Climate Policy Head Wopke Hoekstra, and Energy Commissioner Kadri Simson. French President Emmanuel Macron will also be absent, as will German Chancellor Olaf Scholz for his own reasons. U.S. President Joe Biden will not attend for the second consecutive year. King Charles, along with Russian President Vladimir Putin, Canadian Prime Minister Justin Trudeau, Indian Prime Minister Narendra Modi, Chinese President Xi Jinping, South African President Cyril Ramaphosa, and Australian Prime Minister Anthony Albanese, will also be missing. Simply put, it feels like oil is returning as the world’s primary raw material.

PLAISIO and New Services for Hoteliers

• It wouldn’t matter if it hadn’t been put into practice. The reference is to NGH—a Greek startup—which has begun a partnership with PLAISIO, offering its services on a monthly lease. Next Generation Hotelier (NGH) aims to solve the staffing issues in the hotel industry. It provides a digital receptionist who speaks 110 languages and handles 280 different customer requests (check-in, check-out, room bookings, or virtual tours). When you enter the hotel, you are served by robotic waiters, robotic maids, and advanced property management systems, allowing the hotel owner to efficiently manage operations. NGH, as mentioned, collaborates with PLAISIO, and all its services are now available to hoteliers on a monthly rental basis.

Trump Temporarily Eases Market Uncertainty

• For the first time in history, the S&P 500 broke the psychological barrier of 6,000 points, recording a +46% rise in 13 months. The S&P 500 now boasts a market capitalization of $50 trillion, adding $15 trillion since October 2023. Donald Trump’s swift victory has brought investors renewed hopes for tax cuts and corporate growth, but most importantly, it provided the clarity that markets crave. The CBOE Volatility Index, or VIX, ended Friday at 14.94, down by -32% for the week. This was the biggest weekly drop for the “Fear Index,” as it is known, since December 2021. The S&P 500 index rose 0.4% on Friday and ended the week up 4.7%. The Dow Jones closed the week up 4.6%. It was the best week of the year for both indices. The Nasdaq Composite gained 5.7% over the week.

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