Athens banks rally in spite of loans fears

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European stocks held steady on Monday after eurozone finance ministers gave long-awaited details of a three-year package to help stave off a Greek debt crisis, offsetting weakness in energy stocks.

Analysts said the deal was good news for the markets and the country’s banks in the short term, but Greece might still have a tough time as it repaid the loans.

“The situation in Greece could remain challenging next year, too, as the redemption schedule will be heavy, the unemployment rate higher, the economy weak and fiscal austerity very much on the agenda,” said Daniele Antonucci, at Morgan Stanley.

The commitment to provide Greece with up to €30bn in loans this year boosted the country’s banking stocks.

EFG Eurobank added 11.3 per cent to €6.80, Piraeus Bank advanced 9.3 per cent to €6.45, while National Bank of Greece jumped 5.2 per cent to €14.50.

The Athens General index gained 3.5 per cent to 2,061.04, after being nearly 5 per cent higher earlier in the day.

The FTSE Eurofirst 300 closed flat at 1,101.44.

Energy stocks were lower. Total in France lost 0.9 per cent to €43.98 while Norway’s Statoil dipped 0.1 per cent to NKr144.60.

Polish markets remained resilient in the first trading session since the weekend plane crash that killed the country’s president, central bank governor and other senior officials. Warsaw’s stock index added 0.7 per cent to 43,554.22.

UBS, the Swiss banking group, added 3.1 per cent to SFr18.23 after it posted its highest pre-tax profit since before the credit crisis.

The Swiss bank said first- quarter pre-tax profit would be “at least” SFr2.5bn, three times higher than the previous quarter. The bank added that client withdrawals had declined at all its business divisions.

Meanwhile, Eurazeo, the French financial holding group, fell on reports that it was considering a capital increase to raise about €500m ($679m) for acquisitions.

Rumours that Credit Agricole, which has a 17 per cent stake in the company, did not agree with the move sent Eurazeo’s shares 4.1 per cent lower to €52.53.

Finland’s Metso, the world’s biggest maker of rock crushers, rose 4.5 per cent to €27.15 after the stock was upgraded from “neutral” to “buy” at UBS.

“The higher forecasts are due to higher expectations for mining demand recovery in particular, as well as improvement in energy, automation and metal recycling markets,” said Fredric Stahl, at UBS.

Broadcasters were lower. Shares in Spain’s Telecinco lost 2.5 per cent to €12 after Morgan Stanley downgraded from “overweight” to “equal weight” .

Analysts said that broadcasters would see an upturn from the second quarter
of 2010 onwards as advertising revenues picked up further.

French broadcaster TF1 lost 1.3 per cent to €13.59 and Sweden’s MTG fell 2.8 per cent to SKr414.20.

BASF in Germany fell 0.1 per cent to €46.92 after the chemicals company said it planned to restructure its global pigment business and expected to cut about 500 of the current 2,900 jobs at the unit by 2013.

Essilor, the French eyewear specialist, weakened 2.5 per cent to €46.32 after BNP Paribas downgraded the stock from “outperform” to “neutral” .

Infineon, the German chipmaker, declined 3.4 per cent to €5.03, despite saying it would raise its full-year forecast as second-quarter sales and earnings were better than analysts had expected.

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