On top of the good news on the primary surplus and real GDP, we were pleased to see the prime minister addressing: 1/ the need to legislate on cutting red tape and speeding up company licensing; 2/ the need to reduce taxes, including the corporate tax rate (to 15% from 26%) by 2016. If the administration initiates #1 and fiscal progress allows for #2 we would stop being structurally negative on Greece. Companies relying on a Greek recovery would benefit the most (Banks, OPAP, Titan, Jumbo and Sarantis) with volatility being the main characteristic in 2014. The real risks to Greece’s recovery is not the debt; nor the funding gap; nor even May elections. It is 2015 presidential elections, failure to shift to a reform-driven GDP and persistent deflation…to access this report  contact@researchgreece.com

At current levels investors are ‘buying’ 2016-17E ADV of E250m (2013: E87m) based on E100bn GR total market cap (2013E: E70bn), nominal GDP of E210bn (market cap/GDP: c.50%), velocity of 65% and listing fees of c.E12m (10YR clean average); crystallizing into net income of E40m, or a P/E of 13x 2017E. For the shares to re-rate meaningfully, it would take ADV >E300m with market cap at E130bn and flat velocity rates (or E100bn market cap with >80% velocity). Admitting to our higher-than-average risk aversion we have lowered our WACC rate to 11% from 16% previously. We raise our PT to E8.5 but given we are still questioning GDP recovery, amid slow-moving structural reforms and investments, we reiterate our DOI rating. We do acknowledge that abnormal velocity rates could dislocate our valuation in the short term…to access this report  contact@researchgreece.com

According to Bloomberg News, the EU is weighing an extension of Greek debt maturities to 50 years (currently at 30) and a reduction of the interest rate spread on the first tranche – the Greek Loan Facility (GLF) – by 50bps to zero. The plan is to give Greece an additional funding of E13bn –E15bn through a new aid package, mainly to cover its financing needs (redemptions) within 2014-2015. We suspect the new debt will also be at zero interest charge over the medium term. Is this a game changer?…to access this report  contact@researchgreece.com

With this research note we attempt to address the following issues surrounding the sector: a) what is the market discounting at current levels? b) Impact from the DTA forbearance, c) changes in the recap framework, d) a closer look at Eurobank’s capital increase and d) an update on warrants’ pricing and valuation..to access this report  contact@researchgreece.com

It seems Greece won’t be boring this year.  This report will try to explain how target prices of our covered universe would look like if Greece’s GDP grows by 3% in 2015 and 3-4% in 2016; risk free rate is set at 4%.

This is not our base case scenario. For those investors willing to play the Greek recovery theme we believe the best plays would be…to access this report  contact@researchgreece.com