George Georgiopoulos and Angeliki Koutantou
ATHENS (Reuters) – The Athens Stock Exchange recorded a loss of 16.23% Monday, after his first session following five weeks of forced closure, closure was the result of fears of Greece defaulting on its debt and leave the euro area.
The main index of the local market had lost nearly 23% immediately after opening, before gradually reduce its loss. He realized its worst daily performance since at least 1985, when began the modern data compilation. On the contrary, European FTSEurofirst 300 index gained 0.64%.
“As expected, the market has sunk,” said Takis Zamanis, Beta Securities. “Buyers have emerged for non banking stocks, heavyweight OTE Telecom and such (the paris games group) OPAP, which shows that there is still a buyer’s interest,” added however Takis Zamanis.
OTE, which represented 30% of the volume of day has not fallen by 11.5% less.
The index of the banking sector fell by 30 %, the maximum limit of daily volatility. In this segment, which represents about 20% of the overall index, the five largest banks have been reserved for the decline during most of the session, without finding any buyer.
“It seems that banks may still downgrade Tuesday before redemptions occur, “said one manager. “It will take a few days to the market to rebalance.”
New values are only in the green, especially small caps, for which changes were amplified by very low trading volumes. Thus, the furniture manufacturer Dromeas gained almost 29% after winning a contract worth 30 million euros to furnish the premises of the European Commission.
BANKS ARE MORE EXPOSED
All transactions on the Athens Stock Exchange were suspended in late June as part of the capital control measures imposed by the authorities to curb euros out of the country, while the domestic banking system was threatened with collapse.
Since the government of Alexis Tsipras concluded with its European partners a framework agreement meant to provide relief from the burden of debt in exchange for new reforms and fiscal austerity measures.
But the application of the agreement is far from certain, which continues to feed economic and political uncertainty and could lead to early elections.
According to a article published Sunday by the daily Avgi, near the Syriza party of Prime Minister, the Government wishes to obtain in August a first tranche of 24 billion euros.
Of this amount, the newspaper, go ten billion to the recapitalization of Greek banks, 7.16 billion to repay an emergency bridge loan to 3.2 billion redemption of bonds held by the European Central Bank (ECB) and other institutions.
The European Commission, she considers unlikely that an agreement can be reached before the end of August and believes that a new bridge loan will be required.
These uncertainties contribute to weaken the Greek banking sector, including the probable recapitalization will dilute the value of shares.
The Athens Stock Exchange also suffers the maintenance of capital control measures designed to prevent the country’s euro massive outflows. Individuals can make any such transfer their deposit accounts in order to buy shares.
A source of the authority of the Greek financial markets said that the ban on short sales of shares, due to expire Monday, would be extended.
On the macroeconomic front, Markit institute’s monthly survey of the manufacturing sector, released Monday, shows that industrial activity in July reached its lowest historical level with the collapse in orders as a result of three weeks of total closure of banks . Brussels believes that the Greek economy will contract by 2% to 4% this year.
(Marc Angrand and Wilfrid Exbrayat for the French service)
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