JP Morgan: Sees PPC entering MSCI key index – Analysts expect ‘trading boom’

Her Eleftherias Kourtali

JP Morgan sees the addition of PPC’s share to the MSCI Emerging Markets Index and, consequently, to MSCI Standard Greece, after the completion of the share capital increase, which increases the number of traded shares of the Greek listed company as well. and its capitalization. This is a development that is widely expected by the market, with domestic analysts pointing out that the possible entry of new Greek shares from MSCI is expected to bring trading boom to the ATHEX.

MSCI will announce the results of the six-month restructuring of the indices tomorrow, Thursday, November 11, with the changes taking effect after the market closes on November 30.

In more detail, as the American bank points out in a report, on November 4, PPC announced the completion of the share capital increase with the sale of 150 million new shares at 9 Euros per share. After the completion of AMK, the share capital of the Greek company will increase from 232 million shares to 382 million shares. According to the newsletter, the new shares are expected to be listed on November 16.

PPC is part of the MSCI Small Cap Index of Emerging Markets as well as the FTSE Emerging Markets.

As far as MSCI is concerned, as JP Morgan points out, as the successful completion of PPC’s AMK is expected to increase its capitalization by more than 50%, it is likely that it will carry out a size segment of the companies taking into account AMK. The size of PPC after AMK is currently above the limit required for its inclusion in the MSCI Greece Index (the limit is at $ 2.95 billion capitalization) and therefore MSCI is likely to add the Greek company in the MSCI Emerging Markets Index.

As for the FTSE, given the size of the offer, the FTS is likely to adjust its share increase on an adhoc basis (for that event) to the FTSE Emerging Markets Index, as estimated by JP Morgan.

In this context, the American bank estimates that the weight of PPC in the MSCI Emerging Markets index will move to 0.03% and in the FTSE Emerging Markets will increase by 0.01%.

It is worth noting that a similar provision for the addition of PPC to MSCI Greece Standard and MSCI Emerging Markets has been made by Société Générale. As he had estimated, the share of Jumbo will be deleted while there will probably be two additions at the same time, those of the National Bank and PPC.

According to the French bank, the size / capitalization ratios as well as the weight of the industry in the indexes (size-segment) will lead to these changes in terms of Greek shares in MSCI Greece and the presence of Greece in the MSCI Emerging Markets index. For PPC, he mentioned as a reason for the addition the increase in the weight of the sectors to which they belong to the index (segment).

According to estimates of French banks, the possible inflows for PPC at $ 47.71 million.

Today the Greek shares in the main indices of MSCI are five, OTE (with a weight of 29.5%), OPAP (with a weight of 20.82%), Alpha Bank (with a weight of 20.27%), Eurobank Holdings (with a weight of 17 , 22%) and Jumbo (with a weight of 12.17%). MSCI, with the increase of the Greek shares that participate in its main indices, can therefore be the new catalyst for the ATHEX, bringing “fresh” capital inflows, which the turnover needs.

According to Dimitris Tzanas, investment director of Kiklos Securities, the revision of the MSCI indices tomorrow is expected to lead to the addition of 2-3 new shares (PPC-Ethniki-Mytilineos the candidates) to the five already participating in the main index, boom during the meeting of 30/11 when the rebalancing will take place.