http://www.zerohedge.com/news/2013-06-10/greek-stocks-enter-bear-market-privatization-program-crashes-does-not-burn
Submitted by Tyler Durden on 06/10/2013 11:37 -0400
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_10/06/2013_503740
Greek Stocks Enter Bear Market As Privatization Program Crashes But Does Not Burn
"It all began with Greece," and as Mark Grant notes today, "somebody, somewhere is going to take a hit." It appears the 'news' is piling up thick and fast in the 'islands' nation. As Reuters reports, Greece did not receive any binding bids for natural gas producer DEPA. This was part of the asset-sale program demanded by the TROIKA, with Hellenic Petroleum's sale later in the year now potentially on hold. The sad truth is that the country cannot pay their bills, cannot pay their pension obligations, cannot fund social services and is just about out of money to even run their government. The reality is; they are bankrupt again and there is no way out without some form of debt forgiveness and more money. Debt forgiveness, alone, will not cut the mustard now by itself and some kind of end game may well be near. That is increasingly reflected in 2012's no-brainer trade as GGBs are now back below 60 and down over 10% from their highs and theAthens Stock Index just entered bear market territory, down 20% from its highs.
Greece may reconsider when it sells its biggest oil refiner Hellenic Petroleum, Deputy Energy Minister Asimakis Papageorgiou said on Monday after Athens failed to receive any binding bids for natural gas company DEPA.Athens had planned to privatise Hellenic Petroleum in the last quarter of 2013 as part of an asset sale programme demanded by its European Union and International Monetary Fund lenders.
It seems the market is getting nervous...
and one only has to glance at the reality in Greece to know that this chart is remarkable by any measure of hope. As Southwest's Mark J. Grant explains below, "Somebody somewhere is going to take a hit. Somebody somewhere is going to have to supply more capital in this race to the finish"
It all began with Greece.From the first moment up until today the Greek bailout has been a disaster. Draghi made his “Save the World” speech. The Greek equity markets have rallied mightily. The Greek economy has sunk into the Mediterranean Sea and the people of Greece have suffered the slings and arrows of a barbaric plan that even the IMF has admitted is a failure.The financial projections of the ECB, the EU and the IFM have had all of the accuracy of a sixth grade elementary class making projections in Hoboken. No disrespect to New Jersey. It is unclear to me if these three agencies were living in a world of opiated fantasy or if eternal hope was the driving force or if the motivation was an intentional scheme to mislead everyone. I would like to err on the side of unintentional to be kind but these people cannot have been that uninformed or that misguided in their calculations.I first entered the fray on January 13, 2010 stating that the country would go bankrupt. The yield on their ten year Treasury was 4.38% on that day and while the yield has seen over 30% since then it has never seen 4.38% again even after the Draghi gambit.I have further predicted thatGreece will stand, suffer and take it until the money is shut off. We may be getting close to that point now and what has always been an interesting Greek tragedy may now be entering the final acts.The IMF, according to Der Spiegel, has now indicated that they will not lend Greece anymore money until the shortfall of $6.07 billion is made up. This is a problematic position for Europe. The ECB has already said that they will not be taking any losses in their portfolio so that leaves the various stabilization funds to take the hit or the various nations of Europe to do the debt forgiveness dance or to put up more actual cash themselves. Germany, who has elections shortly, has already said that they would not be participating in either a new money giveaway or a debt forgiveness scheme and so everyone is in a gridlock with no new money for Greece to be forthcoming unless it is broken.In the meantime the financial condition of Greece just keeps getting worse. Every new report gives us numbers that are worse than not only the absurd projections but worse than anyone has imagined or feared. The worst case scenario has not even been close to the actual case scenario as the pension fund obligations of the country now stand at almost 19% of their current GDP.The sad truth is that the country cannot pay their bills, cannot pay their pension obligations, cannot fund social services and is just about out of money to even run their government. The reality is; they are bankrupt again and there is no way out without some form of debt forgiveness and more money. Debt forgiveness, alone, will not cut the mustard now by itself and some kind of end game may well be near.If Greece does blow up the losses will be staggering which is why that Europe has kept them alive.If the IMF holds to their word and refuses additional aid then Europe is finally going to have to confront the issue instead of engaging in their usual can kicking. The cheese is beginning to bind.Somebody somewhere is going to take a hit. Somebody somewhere is going to have to supply more capital in this race to the finish at Marathon. Jason and the Argonauts are about to re-enter the Straits of Messina and the sea monsters, Scylla and Charybdis, are going to have to be dealt with and someone must decide which catastrophe to face once again. If the decision is made not to make the crossing then Mutiny may well be on the horizon!
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_10/06/2013_503722
Expected Gazprom bid for DEPA fails to transpire though Azeris confirm interest in DESFA
On the plus side, however, a bid by Azeri state energy firm Socar for DESFA, the gas transmission network operator, fueled hopes for Greece’s future bid to transport Caspian natural gas to Western Europe as part of the Trans-Adriatic Pipeline. According to sources, Prime Minister Antonis Samaras had meetings with Finance Minister Yannis Stournaras and other cabinet members after news of the Russian withdrawal, which the Russian side attributed to unsatisfactory terms while Greek government sources pointed to objections by the European Commission, currently investigating Gazprom. The failure of the Russians to come through was reportedly keenly felt by Samaras who had met three times in as many months with Gazprom’s chief executive, Alexey Miller. Concerns were not only about potential damage to Greece’s image in the eyes of potential investors. The government must drum up from other sources some 800 million euros in funding that the sale of DEPA would have brought in. Officials close to Samaras indicated however that the funding target relating to DEPA could be put off until next year. Deputy Energy Minister Asimakis Papageorgiou, who sought to play up the bid from Socar for DESFA, said a new tender would be issued for DEPA, though he did not say when. As regards Gazprom, he said the Russian firm had not informed Athens about its reasons for withdrawing. Commenting later in the day, Gazprom executive Alexander Medvedev said the firm was still interested in opportunities in the Greek energy market despite its withdrawal from the DEPA sale, which he attributed to concerns about inadequate guarantees regarding the company’s financial state. EC sources in Brussels told Kathimerini Monday that there was no truth in reports that Brussels had intervened to discourage Gazprom from bidding for DEPA. “That’s not the way the Commission works; Gazprom obviously had its own business interests and is trying to shift the blame elsewhere,” a source said. |
Delays in invoice payment show extent of cash shortage in market
By Dimitra Manifava
Over 35 percent of invoices issued in domestic transactions among enterprises have gone unpaid despite the fact that Greece has the second longest credit period among 14 European countries at an average of 57.8 days, according to the latest Transaction Behavior Barometer by credit insurance company Atradius.
Data show that about one-sixth (16.1 percent) of the value of domestic requirements remain unpaid even 90 days after the deadline, highlighting once more the serious cash flow problem that local enterprises face.
The survey found that 35.1 percent of invoices between Greek companies and 8.7 percent of the invoices issued by Greek companies to foreign clients were not paid by their deadline. The domestic rate is only second to Italy’s 36.8 percent and considerably higher than the European average (including Turkey) of 30.1 percent.
No more than just 54.8 percent of invoices’ worth is paid on time in Greece according to the latest data by Atradius for this year, which is the lowest among the 14 countries surveyed – the average rate stands at 67.3 percent. The average length of time for payment, meanwhile, amounts to 63.2 days, against a European average of 56.6 days.
The survey further found that in an effort to offset losses from reduced demand and the major delay in payments, Greek enterprises appear ready to supply commercial credit to foreign customers in a bid to strengthen their exports. Therefore, while according to the barometer for 2012 the share of Greek companies supplying credit to customers abroad amounted to 27.4 percent, in this year’s survey this rate has grown by 21.5 percent, reaching 33.3 percent of all companies.
The challenge to secure liquidity is the biggest companies face according to 48 percent of respondents, against a European average of 27.8 percent. The second biggest challenge for local firms is the collection of debts from customers according to 20.4 percent of those surveyed.
This has also entailed a shift in corporate policies, as sales on credit have declined from 66.1 percent last year to 60.2 percent this year, while the average period of credit has shrunk from 74.6 days in 2012 to 57.8 days in 2013, the Atradius survey has found.
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