· A new poll showed that a) New Democracy
(28.5%) is ahead of SYRIZA (28.0%) by 0.5%.
This poll was prepared by Pulse for local TV
station Action24. It also showed: b) an increase of concentration in favour of the
two main rivals (SYRIZA and New Democracy), at the expense of smaller political
parties, which struggle to surpass the threshold of 3% in order to enter parliament and
c) PASOK (centre left) manage to recover some of its previous popularity and gets
the 3rd position ahead of Golden Dawn (neo-Nazi).
·
Greece’s Statistical Authority announced that the Import
Price Index of Industry (MPI) fell by -11.5% in July 2015 compared to July’14 (which also showed a decrease of -2.1% compared to July’13). The 12 month average
index (Aug-Jul) decreased by -8.8% compared to a decrease of -2.2% during the same period 2013-4
·
According to data published by COSCO PACIFIC, the containers’
traffic in the port of Piraeus rebounded in August, after a small decrease which occurred in July after the
implementation of capital controls. More specifically, COSCO handled 249,100
containers in Aug’15 vs. 242,100 in Aug’14, which represents an increase of 2.9%.
· According to JP Morgan, the Greek Banks will
need significantly lower capital injection compared to the amount which is
included in 3rd MoU (25 bios euros). It estimated the total amount to approx. 15 bios (private sector will participate with 4 bios). It used three
different scenarios of increase of NPLs, due to the deterioration of economic conditions
(+10, +15, +20 percentage points increase). According to JP Morgan’s report Alpha
Bank and National Bank of Greece will need capital injection only in case of 3rd
scenario. In contrast, Eurobank and Piraeus Bank will need capital injection in
all three scenarios.
·
the US investor
Wilbur Ross stated in his interview to Bloomberg that ECB's scenarios as regards Greek Banks are to pessimist, and this may result to an unnecessary burden to taxpayers. He stressed out that the base
scenario used, may represent a worse picture than the real one. Consequently, the
wrong base scenarios will impact all stress test scenarios. Finally, this will result to higher
capital needs and unnecessary higher borrowings.
Risk assessment:
Greece gradually returns to normality. All polls show that
regardless which party will win elections, the next Greek government will be a
more centrist and more stable government, compared to the previous one. At the moment, the ‘Grand Coalition’ government scenario loses
steam, in favour of a coalition government between either SYRIZA, PASOK &
Potami or ND, PASOK & Potami.
As it was stated in previous commentaries, the impact of
implementation of capital controls to Greek economy, and especially to local banks’
capital needs, will be lower than it was initially expected due to the following
reasons:
·
Most Greek enterprises were well prepared;
inventories were increased during spring, cash was increased; local corporates opened accounts
abroad to handle receivables / payments. In addition, the majority of Greek citizens
was well prepared by keeping cash out of local banks.
·
Black economy still represents a significant
portion of local economy which continues to use cash for daily transactions; total cash was estimated approx. 50 bios before the implementation of capital
controls (cash gradually decreases due to higher usage of bank cards to the benefit of local banks' liquidity position).
·
Due to the fear of deposit haircuts, borrowers
preferred to use their bank deposits to reduce their debt than risk a deposit
haircut. As a result, unexpectedly the NPL formation has been slowing since the implementation
of capital controls.
·
Tourism and exports (except fuels) continue their
increasing trend, impacting positively local GDP; they also offset the reduction of consumer spending
and investments due to the implementation of
capital controls.
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