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Newsletter October 2012


International Broadcasting Centre Tender Completed

The Hellenic Republic Asset Development Fund (HRADF) announced on September 28 that the international tender for the 90-year development of the area and buildings of the International Broadcasting Centre (IBC) has been successfully completed.

LamdaDOMI SA was chosen as the preferred investor. LamdaDOMI is a fully owned subsidiary of Lamda Development SA, a real estate development, investment and management company active in Greece and Southeast Europe.

The direct financial compensation was agreed at 81 million Euro. The Greek government might receive up to an additional 32.4 million Euro, depending on the development of Greece’s macroeconomic conditions over the next 50 years, as reflected by the sovereign credit rating of the country.

John Emiris, CEO of the Hellenic Republic Asset Development Fund said, "Not only will the development of the land parcels abutting the International Press Centre upgrade the entire area from a commercial perspective, it will also spark rekindled investor interest in the real estate market of the capital of the country.”

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Cosco and Piraeus Port on Time
Piraeus Port Authority SA (PPA), which operates Greece’s biggest port, said that work by Piraeus Container Terminal SA, a unit of Cosco Pacific Ltd. (1199), to modernise Pier II and build a third pier is proceeding on time. “The projects are being carried out within the contractual dates” the authority said in an e-mailed statement today.

Cosco won in 2009 a contract to run container operations at Pier II, which started in 2010, and to build Pier III. The two facilities will have total container handling capacity of 3.7 million 20-foot equivalent units when the third pier is operational. That’s scheduled for 2015.

October 1, 2012
Source: Bloomberg

Greece Unblocks Subsidy for Formula 1 Track Construction
Greece unblocked a subsidy of 28.9 million Euro ($37.2 million) for the construction of an international-standard racetrack that can be used for staging Formula One car racing, the Ministry of Development, Kostis Hatzidakis said.

The track, which will be designed to host other events as well, including world championship motorbike racing and go-kart racing, will be built in Xalandritsa near the western port city of Patras at a total cost of 94.6 million Euro, the Ministry said. Racetrack Patras SA, a private investment company, will oversee the project.

Greek Deputy Development Minister Notis Mitarachi also signed documents to unblock other subsidies worth a total of 44.4 million Euro for a project to build a glass pane-making factory in northern Greece and for modernising and expanding facilities at the luxury Elounda Bay palace hotel in Crete, including the building of a new conference center, according to the statement.

October 1, 2012
Source: Bloomberg

Power-One: New Strategic Partner in Greece
Power-One, Inc. announced on September 11 that it has won RECOM Ltd. as strategic partner and distributor in Greece. The leading wholesaler of solar PV components and EPC contractor, which is headquartered in Athens, Greece, with branch offices throughout the country and active presence all over Europe, specialises in the distribution of PV modules, and inverters as well as the design and implementation of large PV projects.

Following the successful cooperation in the previous year, Recom and Power-One begin a formal strategic partnership. Recom currently offers a complete range of all Power-One’s reliable string and central inverters, including the AURORA UNO single phase inverter for average-sized residential PV installations and the AURORA TRIO three-phase string inverter for commercial installations amongst others.

“The combination of the best-in-class performance and reliability Power-One’s inverters offer convinced us,” said Laert Tunyan, CEO & Co-Founder of Recom. “We believe that the combination of our wholesale and system planning know-how and the expertise of the Power-One sales and support teams is a perfect match. Through this partnership we will be able to offer our customers leading solar energy solutions and services.”

“We are delighted that Recom has placed its confidence in us as a strategic partner for the growing Greek solar market,” said Riccardo Filosa, Director Sales Southern EMEA at Power-One. “Recom’s performance in the photovoltaic segment in this region is impressive, and we are looking forward to supporting them with our extensive expertise and know-how in the future.”

Goldman Sachs: Greek Economy Started to Adjust in a Substantial Way reports that in a Global Markets Daily from last July Goldman Sachs first highlighted that the most recent data indicated that the Greek economy had started to adjust in a substantial way.

According to a new report published on September 14th the bank says that the most recent data continues to point in that direction.

The August budget deficit numbers came in well ahead of targets. The primary deficit for the first 8 months of the year came in at 1.3 bn Euro (about 0.6% of GDP) vis-à-vis a target of 4.2 bn Euro for the period and compared with a near 6 bn Euro deficit over the same timeframe last year. This is despite a 2 bn Euro decline in revenues which was mostly due to cyclical forces. Most of the savings came from primary budget expenditure reduction but the public investment budget was also cut. Given that this data is calculated on a modified cash basis, it is subject to future revisions on the final accrual budget report at the end of the year. However, we do not expect the deviation to be too large or to offset the bigger picture of a budget adjustment that is currently on track.

According to EU data, as of Q1 unit labour costs in Greece have declined to levels last seen in 2000 relative to EMU 17 unit labour costs. This is the result of a substantial reform in labour markets that took place in September and had direct consequences for private sector wages. Anecdotal evidence is for further wage reductions in the interim period. This is all evidence that the internal devaluation process has helped Greece regain most of the competitiveness lost over the past decade, at least in labour market terms.

Despite the tight credit conditions for Greek exporters, the goods and services trade balance has continued to improve and to hover at a monthly seasonally adjusted deficit level of about 600 mn Euro (on a 6-month rolling average basis), much lower than the prevailing levels in mid 90s prior to Eurozone entry. At the peak of Greek imbalances, the same trade deficit metric was at 2.3 bn Euro monthly. Part of the correction is cyclical and hence not necessarily linked to a structural improvement in the prices of the tradable versus non tradable sectors. That said, combined with the evidence of unit labour cost declines, it is reasonable to assume that a significant chunk of the improvement may be structural as well.


President of Israel in Greece
Shimon Peres, President of Israel, completed a three-day state visit to Greece on August 9 at the invitation of Karolos Papoulias, President of the Hellenic Republic. The purpose of the visit was to upgrade bilateral relations and to focus discussions between the two countries on investment, energy, tourism, shipping, agricultural development, environmental management, and commerce.

Mr. Papoulias briefed Mr. Peres on the economic crisis Greece is facing, noting that to a great degree it is the manifestation of a systemic crisis of the Euro and adding that without common economic governance and steps toward political unification, the European monetary union was heading to an impasse. Mr. Peres said that the two countries belong to the same spiritual family but also the same geographical space, and now a "scientific dimension and a political process" has been added to the relations between Greece and Israel.

President Papoulias said, “The convergence of interests in Eastern Mediterranean allow for the establishment of a strategic relationship—with the Republic of Cyprus being an integral component—considering that the discovery of significant underwater natural gas deposits and the transport of Israeli and Cypriot natural gas to Europe via Greece change the geo-economic and geopolitical framework in the greater region.”
Greece's Minister of Rural Development & Food, Athanassios Tsaftaris met with Israeli Agriculture and Rural Development Minister Orit Noked during the formal visit and discussed forging even closer bilateral cooperation in the sectors of water conservation and management, organic farming, the production and distribution of Protected Destination of Origin (PDO) and Protected Geographical Indication (PGI) products, applied farm research, land improvement projects and aquiculture.

August 9, 2012
Source: ANA