Historic fall of the Athens Stock Exchange – Les Echos

The Greek stock market crash was widely expected after five weeks of closure, following the introduction by the Greek government of capital controls. And she materialized on Monday morning. In the first exchange, ESA index of the Athens Stock Exchange has indeed plunged 22.87%, recording the largest decline in its history. By late afternoon, the Athens Stock Exchange finished Monday down 16.23%, a historic fall according to exchange operator. The ATHEX index closed at 668.06 points recovering slightly over the day of its opening with a dive of 22.82%. According to the Greek bourse operator, the last drop of this magnitude was in December 1987 with losses of 15.3% on a session.

The banking sector plunged

All securities listed on the Athens Stock Exchange “were in the red at the end morning. A trend that, with few exceptions, remained true in the day.

The banking sector is largely penalized. The action of the National Bank of Greece, the first commercial bank in the country, yields 30%, the maximum allowed in one sitting. But all the major financial institutions of the country suffer the same fate. Piraeus Bank plunges 30%. Hellenic Exchanges, the market operator, sinking 29.97%.

The banks are at the forefront because the Greek financial sector needs to be recapitalized. According to the newspaper Avgi, close to the government of Alexis Tsipras, Athens Research about 10 billion euros this month to recapitalize banks, which constitute about 20% of the main index of the Stock Exchange.

Coca Cola HBC, the heavy-weights of the index, meanwhile loses 8%.

Transaction Framed

Stock market operations resumed with limitations for local investors. They can not finance the purchase of securities by withdrawing money from their bank accounts in Greece, thus remaining oumis s control of capital in force in that country. They may, however, use offshore accounts or make cash transactions.

In fact according to some observers, the volume of transactions remains low.

Stock market authorities should extend the ban on short selling, due to expire on Monday, according to Reuters.

A total capitalization equivalent to that of Danone or Schneider

The fall of the market is anticipated by operators, while the stock market experienced its longest closure since 1970. During this period, some investors were using ETFs – exchange traded funds – in the United States. The Global X FTSE Greece ETF had almost lost 20% between June 26 – the last day of opening of market- and Monday, according to Bloomberg data

La. Athens sharp drop weighs on investor sentiment. Emerging markets are falling, affected also – and surtout- by the new plunge in Shanghai.

Although it is under the spotlight, the Athens market is still very limited throughout Europe. The capitalization of the Greek Stock Exchange, was just over € 39 billion (*) in June. This is the equivalent of a Danone or Schneider Electric.

(*) According to the latest figures from the World Federation of Exchanges, on the capitalization of so-called “domestic” securities (excluding international values)

More information to follow