Transcript www.hellascapital.ca

Jan 2005
Greek Capital Market
&
Hellenic Exchanges
by
Alexandros Moraitakis
Agenda
Greek Capital Market
Market Data
Market Conditions
ASE- HELEX Group
Concluding Remarks
3-7
8-13
14-15
16-28
29-30
Greek Capital Market
► Investment opportunities in the Greek capital market
► Objectives of Athens Exchange: market depth, high standards,
participation in the single European capital market
► Vision: Strong, safe and reliable
► Significant progress in Greek capital market in the context of
financial liberalisation
► Internationalized market as, currently, foreign investors
participate by about 35% in total ATHEX capitalization
3
Greek Capital Market
► Qualitative and quantitative changes led to the upgrading of the
Greek capital market, which was declared a developedmature market by international investors, in May 2001
► Certain economic developments at the background. Economic
stability, economic growth, structural reforms
► Sound regulatory framework, transparency, disclosure,
corporate governance
► Efforts for a more efficient market continue
4
Greek Capital Market
Greek Equities Market
► Main market
► Parallel market
► New market
► Secondary listing of equities
► GDRs, and units of mutual funds for emerging markets
5
Greek Capital Market
Futures and Options
► Stock Indices
► Stocks
► Bonds
► Currency
6
Greek Capital Market
Indices
► General Index
► Parallel market index
► Sectoral indices
► FTSE/ASE 20
► FTSE/ASE Mid 40
► FTSE/ASE Small 80
► FTSE/ASE 140
► FTSE Med 100
7
Market Data - Spot
Daily Value of Transactions
180
160
140
169
€ million
120
100
141
80
141
107
60
40
20
0
2001
8
2002
2003
2004
Following a significant decline in 2000-02, volumes in 2003 and 2004
stabilized at a much higher level
Market Data - Derivatives
Derivatives Daily Volume
13,000
11,000
8,403
(# contracts)
Total: 9,118
5,538
5,259
4,102
5,000
3,000
1,000
11,116
Total: 14,921
9,000
7,000
Total: 19,463
Total: 19,496
11,327
2,111
1,146
3,643
3,624
1,917
1,049
109 62
180
826
315
76
513
125
-1,000
2001
FTSE/ASE 20 Futures
FTSE/ASE Mid 40 Options
9
2002
2003
FTSE/ASE Mid 40 Futures
Stock Futures
Derivatives market has good growth prospects
2004
FTSE/ASE 20 Options
Equity Market Indicators
ASE Composite Index
FTSE/ASE 20
FTSE/ASE 40
FTSE/ASE 80
Market Cap (€ bln)
Market Cap / GDP (%)
Avg. Daily Volume (€ m)
10
2002
31 Dec
1.748,4
863,9
187,5
464,5
66,1
50%
107,4
2003
31 Dec
2.263,6
1.170,0
237,7
597,4
84,9
61.7%
141,4
2004
31 Dec
2.786,2
1.547,5
231,1
470,6
85,6
61%
141,0
Equity Market Indicators
11
% of GDP
24,7%
20,0%
15,5%
21,3%
16,0%
14,8%
19,9%
29,7%
62,9%
171,2%
97,1%
77,9%
50,0%
61,7%
61,0%
180,0%
160,0%
140,0%
120,0%
100,0%
250,0
200,0
150,0
80,0%
60,0%
40,0%
20,0%
0,0%
100,0
50,0
0,0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
YEAR
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
MARKET CAP AS % OF GDP
CAP (bil. euro)
GDP (bil. euro)
6,7
27,1
6,5
32,5
5,7
36,8
9,0
42,3
10,5
65,6
11,8
79,9
17,5
87,9
28,9
97,2
66,6
105,8
192,9
112,7
118,0
121,5
97,3
124,9
66,1
132,2
84,9
153,2
85,6
164,4
CAP (bil. euro)
% of GDP
Key sectors in Greek capital market
Sector
Financials
Consumer goods
Telecoms
IT – Technology - Internet
Media
Industry – Energy
Leisure
Utilities
Other
12
Market cap
29.1%
12.7%
16.8%
2.5%
0.8%
11.7%
8.3%
7.1%
11.0%
MSCI Greece
47.5%
5.5%
15.9%
2.2%
0.0%
6.2%
7.7%
3.9%
11.1%
MAJOR STOCK EXCHANGES RETURNS June 2004
Ranking YTD %
13
Certain conditions seem to establish favorable
market conditions for the foreseeable future
► Significant prospects for many economic sectors, such as
banking, construction, refineries and cement, among
others.
► Rising investor interest (M&A Deals, etc)
► Olympic games raised country's profile, increased demand,
while we expect positive post Olympic effects.
► Continuous economic growth as structural funds are to
continue, until 2008 while Government’s investment
spending is to continue vigorously in coming years.
► High multiplier effects in the economy due to large investment
prospects.
► The research of most Greek and foreign stock brokerage houses
indicates a market P/E of 15.1x and an EV/EBITDA of
8.7x. (estimations for 2005)
14
Measures to improve transparency, disclosure
and investor protection
► Emphasis on listed companies’ fundamentals transparency and
disclosure
► Corporate Governance (Law 3016/2002)
► International Accounting Standards (mandatory for all listed
companies for the 2004(EoY) financial statements)
► Control of financial statements and external auditors (Every
year, an independent committee established, randomly
selects 10% of all listed companies financial statements
and review their auditors reports)
► Capital market ombudsman
15
Group Structure
100%
100%
100%
Cash & Derivatives Markets
Information Services
Marketing in Northern Greece
Promoting Emerging Capital Markets
16
99%
100%
Cash Market
Clearing & Settlement
Derivatives Market
Clearing & Settlement
To merge with Helex
The Group is vertically integrated, providing trading, clearing, settlement, information services and IT
Hellenic Exchanges S.A. (HELEX)
 HELEX is the holding company of the Athens Exchange
Group
 HELEX Group operates the local cash and derivatives
markets and the clearing, settlement and registry systems
 HELEX is vertically integrated, as it provides trading,
clearing, settlement, registry, information and IT services
 HELEX is listed on the Athens Exchange and is currently
capitalized at € 540 million (1)
(1) As of December 31, 2004, closing price € 7.60
17
HELEX
 During 2004, trading activity, in both cash/spot and
derivatives markets, held positions compared to 2003,
despite weak Q3 2004, while market capitalization increased
by 8% mostly in the last quarter.
 The Group is now fully privatised and aims for revenue and
shareholder value maximization.
 All supervision and control activities are removed from the
Exchange.
 HELEX has embarked on a successful re-engineering
program, achieving significant cost reduction.
18
Share performance vs ASE General Index
170
160
150
140
130
120
110
100
90
80
49,02%
HELEX
19
ASE General
Dec-04
Nov-04
Oct-04
Sep-04
Aug-04
Jul-04
Jun-04
May-04
Apr-04
Mar-04
Feb-04
Jan-04
Dec-03
Nov-03
Oct-03
Sep-03
26,82%
Diversified shareholder structure
Shareholder structure 31/12/2004
20.5%
Local Banks
4.6%
35.5%
Local Instirutional investors
Local Brokerage firms
International instutional investors
21.2%
1.2%
4.1%
Retail
Other
12.8%
Treasury stock
HELEX was fully privatized during September 2003 through a public offering
20
Strategy - Objectives
 Develop further domestic market
 New product development
 More emphasis on sales, and revenue differentiation
 Restructure and rationalize HELEX Group to increase
efficiency, effectiveness and reduce costs
 Expansion in Southeastern Europe
 Co-operation and further integration with European markets
and market participants
21
 Maximize shareholders value
Domestic Developments
 New products and new markets
 Transfer of regulatory competences to the Capital Market
Commission
 Internal Rule Book
 New Premises
22
Operational Re-engineering
 Evaluate and revise the Group’s
organization model
 Redesign key procedures and
structures
 Ensure more efficiency, control
and maximization of synergies
 Reduction of operation expenses
Become
a leaner,
more
effective
& cost
efficient
organization
23
Expansion in the SE Europe Region




24
Co-operation with local exchanges
Promotion of products, GDR’s, dual listing
Information dissemination
In-source IT infrastructure
Promotion of co-operation in the EU
 Monitor closely the new consolidation phase among the
various European Exchanges
 Contact with major exchanges, exchange alliances &
depositories
25
Turnover drivers – 2004 (estimates)
Cash transactions
53%
7%
Members subscription
Derivatives
Listed companies
15%
12%
6%
3%
4%
Vendors
IT services
Other income
 Turnover has become less reliant on cash market
transactions. Income from securities (trading, clearing and
settlement) represents 53% of group turnover, compared
to 63% in 2000
 The derivatives market contributes 15% of group turnover,
compared to just 2% during the year 2000
26
Cost Drivers 2004 (estimates)
Total Costs (€ millions)
Cost drivers 2004
60
50%
15%
50
40
58.3
50.7
30
44.9
20
42.9
10
8%
0
2001
2002
2003
2004(est)
Personnel
Marketing
Maintenance
4%
3%
3%
Taxies and Levies
Rent
17%
Overhead
Telecoms
 Cost has been cut by 10% on a compounded basis, from
27
2001 to 2004, the reduction stemming mainly from
personnel, marketing and overhead expenses
 2004 estimate includes €1,9m one-off fees from the sale of
stock portfolio
 Full benefits of cost savings will show in the years to come
Group Personnel
700
600
500
615
400
537
461
417
300
2001
2002
2003
2004
 Staff accounts for approximately 50% of the cost structure
 Approximately 32% reduction in personnel numbers since
the end of 2001
28
Note: Personnel figures refer to end period
Concluding Remarks
The Country
 Significant infrastructure
investments
 Capital inflows through the
3rd Community Support
Framework
 Successful completion of the
Olympic Games
 Good growth prospects of
the local market
 Improved corporate profits
 Reduction of corporate taxes
29
HELEX
 Strong Balance
Sheet
 Improving
financials/cost
structure
 On going
successful reengineering
process
 Maximization
of shareholders
value
Thank you
Alexandros Moraitakis
BoD member, HELEX
Chairman, SMEHA
CEO, NUNTIUS Securities
Tel.: +30 210 3350599
Cell: +30 69 77 903 903
Email: [email protected]