The Greek stock exchange took a beating today as trading resumed after a five-week shutdown forced by capital controls, with the main index losing around a fifth of its value. Bank shares were particularly hit.
The ATHEX plunged by nearly 23 percent at the opening before clawing back to losses of 17 percent in mid day trade.
Analysts noted that the situation could deteriorate before the market aligns itself.
The state agency ANA reported that 10 billion euros had been wiped out on the stock exchange.
“The situation in Greek equity markets will have to get a lot worse before it gets better,” said Luca Paolini, Pictet Asset Management’s chief strategist in London. “There are still critical risks to be resolved.”
The country’s main banks took a heavy blow at the opening with drops of 30 percent.
But investors offloaded unreservedly on all the top Greek companies, including gambling giant OPAP, main electricity provider PPC, top telco OTE and leading refiners HELPE, which were also shedding between 14 and 23 percent.
“Pressure by sellers was high. It is logical and anticipated by everyone,” stock market chairman Socrates Lazaridis told Bloomberg TV, noting that he expected the market to stabilize in a month’s time.
“After five weeks of non-transacting ability, it was important to incorporate the changes that have taken place in the international environment of capital markets, and also on the local environment where there was a number of important changes,” Lazaridis said.
“We were not expecting something different today,” said analyst Manos Hatzidakis of Beta Securities.
“The stock exchange has not been closed for a month since 1974… This is a risk factor especially for major investors.”
“This is reflected today with great intensity… It is a sign of the insecurity that pervades the market,” he said.
Lazaridis, the bourse chairman, noted that up to 65 percent of investors on the Athens bourse are foreigners.
The volatility cap has been reduced from 30 percent to 20 percent during the first three days of trading.
The last trading session on the Athens stock exchange was on June 26, ending a few hours before Prime Minister Alexis Tsipras announced a referendum on the stringent bailout conditions demanded by Greece’s international creditors.
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