Athens News Agency: News in English (AM), 98-03-19

Athens News Agency: News in English Directory - Previous Article - Next Article

From: The Athens News Agency at <http://www.ana.gr>

NEWS IN ENGLISH

Athens, Greece, 19/03/1998 (ANA)

MAIN HEADLINES

• Markets continue favourable reaction to devaluation
• Upcoming EU accession negotiations dominate Simitis-Horn talks
• Bulgarian defence minister begins visit to Greece
• Ecumenical Patriarch to visit six Canadian cities
• Checks on market prices intensify
• T-bill auction on March 23
• Greek stocks rise again in record turnover
• Greek money markets still euphoric after ERM entry
• State telecom to launch new float in final quarter of '98
• Drachma devaluation will benefit ocean-going shipping
• Consumer watchdog: devaluation to hit Greek households
• Devaluation expected to positively affect tourism
• IBRD to issue Eurobonds worth 20 billion drachmas
• Weather
• Foreign exchange

NEWS IN DETAIL

Investors yesterday continued their favourable reaction to the recent drachma devaluation, with the volume of trading at the Athens Stock Exchange reaching an all-time daily high of 161.3 billion drachmas.

Foreign institutional investors continued a buying spree on the Athens bourse, bringing in total foreign exchange inflows on Wednesday of about 1.1 billion US dollars.

The general index closed 1.01 per cent higher at 1,754.93 points, compared to 1,537.37 points at the close of the last trading session before the devaluation last Friday.

Replying to opposition questions on the incorporation of the drachma into the EU's Exchange Rate Mechanism (ERM), Prime Minister Costas Simitis told Parliament yesterday that this development "fulfills a crucial and necessary precondition for participat ion in Economic and Monetary Union (EMU)".

The Premier added that it also showed increasing confidence in the country's economy, securing solidarity and support by Greece's EU partners for the national currency.

Greece's success in the recent developments, he said, was evidenced by the positive market response, as well as the inflow of foreign exchange, the bourse's rise, security markets' recovery, a decrease in long-term interest rates and the international d emand for Greek securities.

However, the premier came under a severe attack from deputies from other opposition deputies, with main opposition New Democracy deputy Dimitris Sioufas calling Mr. Simitis the "prime minister of unemployment, taxes and devaluation," and demanding his resignation. Mr. Sioufas said Mr. Simitis had gone back on his previous assurances that the drachma would not be incorporated into the ERM now, but in 2001.

Coalition of the left and Progress (Synaspismos) leader Nikos Constantopoulos also criticised the premier for what he called the equalising of the drachma's ERM incorporation with the Greek people's "poverty and degradation."

Democratic Social Movement (DHKKI) leader Dimitris Tsovolas demanded that the premier apologise to the Greek people, and that the government resign. He underlined that while tabling the 1998 state budget just a few months ago, the prime minister firmly advocated that the drachma's stability was a precondition for a stable economy.

Meanwhile, the president of the Federation of Greek Industries (SEB), Iason Stratos, expects the drachma devaluation to yield positive results, saying however, that measures were not entirely appropriate.

Referring to forthcoming negotiations with the General Confederation of Workers of Greece (GSEE), Mr. Stratos added that EMU was a national target and any agreement to result from those talks should have to serve that target.

A SEB announcement on the decision to incorporate the drachma into ERM said that this should be seen a double reassurance.

The SEB announcement further said that what was of more importance was the course of the inflation rate. SEB underlined that the drachma devaluation would generally aggravate prices, although the severity and duration of high prices remained to be seen,as it depended on several factors.

Upcoming EU accession negotiations dominate Simitis-Horn talks

Prime Minister Costas Simitis and his Hungarian counterpart Gyula Horn held talks yesterday on issues relating to European Union accession negotiations and Hungary's forthcoming admission into the NATO alliance.

The two premiers had 90 minutes of talks prior to a working lunch given by Mr. Simitis in honour of his Hungarian counterpart.

Mr. Horn arrived in Athens yesterday morning and was also received by President of the Republic Kostis Stephanopoulos and Parliament President Apostolos Kaklamanis.

He later met with Greek business representatives at a hotel in the Athens seaside resort of Vouliagmeni.

Mr. Simitis reiterated after the talks that Greece wanted EU enlargement to continue with as many countries as possible.

Hungary, he said, had made remarkable progress in recent years in the sector of economic reforms.

He added that Hungary's forthcoming NATO accession had also been discussed, as well as the situation in the Balkans, which both leaders agreed must be handled in such a way so as to safeguard stability in the region.

In addition, Mr. Simitis said he briefed Mr. Horn on Greece's positions concerning Greek-Turkish relations and the Cyprus problem, while underlining the importance of further developing cultural and economic cooperation between Athens and Budapest.

Mr. Horn said his visit to Athens was within the framework of his decision to visit all EU countries prior to the commencement of his Hungary's EU accession negotiations on March 31.

He expressed satisfaction at the support given to Budapest's efforts to join the EU and NATO by Athens.

On the Kosovo crisis Mr. Horn said: "The Serbs must make efforts to implement existing agreements, particularly the educational agreement of 1996, while the Albanian-speakers must understand that any solution has to be sought within the existing framework, namely, without any issue of a change of borders being raised," Mr. Simitis added.

In Mr. Horn's meeting with Greek businessmen, methods to promote bilateral trade and relations were examined.

The Greek side requested of Hungary, if possible, stricter labour legislation to curb the high percentage of what they called labour absenteeism in plant shifts.

Moreover, the cement and iron ore mines sectors in Hungary have attracted Greek interest, while Greek shipowners are discussing participation in the privatisation of the Hungarian fleet.

Representatives of the Greek-Hungarian Business Council will accompany President Stephanopoulos on his scheduled visit to Hungary at the end of April.

Additionally, Hungary will organise a "Tourism Week" in Greece on March 25.

Bulgarian defence minister begins visit to Greece

Bulgarian Defence Minister Georgi Ananiev today begins a three-day visit to Greece at the invitation of his Greek counterpart Akis Tzohatzopoulos, the defense ministry press office said Tuesday.

On the first day of his visit Mr. Ananiev will attend an exercise at a special forces training centre.

The two sides are expected to sign two defence ministerial accords: on cooperation in the military-technical field; and for participation of a Bulgarian transport platoon in the Greek forces within SFOR in Bosnia and Herzegovina.

A framework agreement on military cooperation between Bulgaria and Greece has been effective for seven years. Greece was the first NATO member to sign such an agreement with Bulgaria.

Mr. Ananiev will also discuss European and Euro-Atlantic integration, regional security and the development of bilateral military relations with his Greek counterpart.

He will be received by Greek President Kostis Stephanopoulos and Parliament chief Apostolos Kaklamanis.

Ecumenical Patriarch to visit six Canadian cities

Ecumenical Patriarch Vartholomeos will tour six Canadian cities beginning in late May, the first ever visit to the North American country by a Patriarch.

According to an announcement by the Orthodox Bishopry of Canada, Vartholomeos will first visit Ottawa, where he will meet with Canada's Governor-General Romeo A. LeBlanc, Prime Minister Jean Chretien, Canadian Foreign Minister Lloyd Axworthy as well as Athens' and Ankara's ambassadors to Ottawa.

The Patriarch's May 25-June 2 tour will also include visits to the Orthodox communities in Vancouver, Winnipeg, London, Toronto and Montreal.

Checks on market prices intensify

All enterprises producing,importing or trading in consumer products are obliged to convey price lists containing any change in prices to the development ministry immediately, the government stated yesterday.

Meanwhile, the Economic Crime Prosecution Squad (SDOE), market control units and development ministry services are continuing checks throughout the country to ensure the smooth operation of markets and the avoidance of possible profiteering in the wake of the recent devaluation of the drachma.

No price increases have occurred in the prices of medicines, while Development Undersecretary Mihalis Chrysohoidis said no change in prices is justified, at least for the next three months.

On the contrary, the price of sugar increased by 7 per cent because, as representatives of the Greek sugar industry claimed, there was a risk of large quantities of sugar being exported with old prices and immediate reimportation with new increased prices.

In addition, price increases ranging between 8-10 per cent were ascertained in various building materials (iron, concrete and bricks) which are considered unjustified. For this reason, SDOE officials are intensifying checks at enterprises trading in such products.

Confusion also exists in the car market where many companies are selling cars at an increased price of 7 per cent, while others are observing a wait- and-see policy to determine the new prices of cars in the next few days.

T-bill auction on March 23

The finance ministry will organise an auction for Greek state securities on March 23. The securities concern one-year T-bills worth 100 billion drachmas and 10-year bonds with a stable annual interest rate of 8.6 per cent and worth 150 billion drachmas.

The auctions will be conducted with competitive bids by the main market negotiators in accordance with the process anticipated by their operational regulation.

Non-competitive bids will be accepted by basic and non-basic negotiators, which can be satisfied up to a total of 20 per cent of the amount auctioned per category of securities.

The issue and settlement date is March 26.

Greek stocks rise again in record turnover

Greek equities yesterday broke new historic levels on the Athens Stock Exchange but profit-taking drove down prices to end off the day's highs.

Foreign institutional investors continued buying into the market and fund managers from London and New York invested more than 100 billion drachmas in the previous session, traders said.

The general index closed 1.01 percent higher at 1,754.93 points after breaking the 1,800 barrier for the first time ever at midday, extending its sharp upward trend for a third consecutive session.

Trading recorded a new all-time high with turnover at 161.3 billion drachmas reflecting investors' thirst for higher yields currently offered by equity prices.

Sector indices were mixed. Banks rose 2.92 percent, Insurance fell 1.01 percent, Investment eased 3.35 percent, Leasing ended 1.07 percent off, Industrials ended 0.82 percent down, Construction fell 2.55 percent, Miscellaneous dropped 2.28 percent and H olding was 1.40 percent down.

The parallel market index for small cap companies ended 1.72 percent off. The FTSE/ASE blue chip index rose 2.52 percent to 1,020.25 points.

Hellenic Telecommunications Organisation, Aget Heracles Cement and Alpha Credit Bank were the focus of attention and traded heavily at 8.2 million, 4.3 million and 1.1 million stocks respectively.

Broadly, decliners led advancers by 156 to 62 with another 22 issues unchanged.

Naoussa Mills, Varitini, Klonatex and Hellenic Sugar scored the biggest percentage gains at the day's 8.0 percent upper volatility limit, while Terna, Proodeftiki, Gnomon, Dane and Halyps Cement suffered the heaviest losses at the day's 8.0 percent limi t down.

National Bank of Greece ended at 28,110 drachmas, Ergobank at 18,740, Alpha Credit Bank at 20,620, Delta Dairy at 3,400, Titan Cement at 18,095, Intracom at 16,200 and Hellenic Telecommunications Organisation set a new record close at 8,250 drachmas.

Greek money markets still euphoric after ERM entry

Greek money markets yesterday remained buoyant for the third consecutive session in the aftermath of the drachma's entry into the ERM at the weekend and devaluation by 14 percent.

Bankers reported hefty capital inflows of 200 million US dollars, 360 million Ecus and 870 million DMarks at the drachma's fixing in the domestic foreign exchange market.

The Greek currency, helped by a recovery in international confidence in the economy, rose 0.25 percent and 0.17 percent against the DMark and the Ecu respectively.

State telecom to launch new float in final quarter of '98

Hellenic Telecommunications Organisation (OTE) will float a third stake of its equity in the final quarter of 1998, government and OTE officials said yesterday.

The stake in OTE to be floated on the Athens bourse will be at least 10 percent of the company's equity capital.

The decision was taken at a meeting attended by National Economy and Finance Minister Yiannos Papantoniou, Transport and Communications Minister Tassos Mantelis and senior OTE executives.

OTE successfully floated 20 percent of its equity in two previous public offerings.

The government is, however, considering raising OTE's total stake for sale to 49 percent.

A final decision will be made in April.

Drachma devaluation will benefit ocean-going shipping

Merchant Marine Minister Stavros Soumakis said yesterday that the drachma's 14 percent devaluation at the weekend would benefit ocean-going shipping and crews, but not coastal shipping.

The devaluation of the drachma was linked to the currency's simultaneous entry into the European Union's exchange rate mechanism.

Consumer watchdog: devaluation to hit Greek households

Four-member Greek households will have to foot an extra 218,682 drachma bill on their annual expenses due to the drachma's 14 percent devaluation at the weekend, a consumer watchdog said yesterday.

The Consumers' Institute (INKA) said the inevitable drop in consumers' purchasing power was likely to lead to imports of cheaper, poor quality goods.

Inflationary tendencies could jeopardise the economy, hurting consumers and commerce, INKA said.

Devaluation expected to positively affect tourism

More favourable exchange rates for tourists visiting Greece this year due to the drachma's recent devaluation may spur a rise in tourism, Greek National Tourism Organisation (EOT) Secretary General Nikos Skoulas said.

"With the recent 14 per cent readjustment, combined with major improvements in the tourist infrastructure and the quality of services and products, holidays in Greece are becoming even more attractive and accessible," he said.

He said this prospect does not only concern visitors for 1998 and "last minute travellers" but also all those who are now thinking of their holidays in 1999.

IBRD to issue Eurobonds worth 20 billion drachmas

The International Bank of Reconstruction and Development (IBRD) will issue three-year Eurobonds worth 20 billion drachmas on April 3, 1998.

The interest rate was set at 9.75 per cent for the first year, 8 per cent for the second and 7 per cent for the third, while the issuing price was set at 99.85 per cent.

The leading managers of the issue are Goldman Sachs, the National Bank of Greece, the National Mortgage Bank of Greece and Tokyo-based Sanwa.

The major managers are First Chicago, Hambros, Merrill Lynch and Morgan Stanley, while 14 more credit institutions are also participating. The bond is listed at the Luxembourg Stock Exchange and falls under British law.

WEATHER

FOREIGN EXCHANGE

(C.E.)

Athens News Agency: News in English Directory - Previous Article - Next Article