Sell-offs, Eurobank and bonds bol­ster bourse

Kathimerini English - - Front Page - BY ANESTIS DOKAS

The Athens bourse’s start to the year has been even bet­ter than the glo­ri­ous pe­riod of 1999, with the bench­mark in­dex post­ing gains of over 10 per­cent in the first four ses­sions against a 9.8 per­cent rise in the same pe­riod 15 years ago.

Very swiftly and us­ing funds left over from the last few ses­sions of 2013, the lo­cal stock mar­ket has once again out­per­formed global mar­kets, as with just the first 10 days of the year gone, the gen­eral in­dex at the Athi­non Av­enue in­sti­tu­tion has al­ready hit 1,300 points, while in­ter­na­tional agen­cies had pre­vi­ously pre­dicted a bench­mark high of just 1,400-1,450 points for the whole of the year.

From the depths of July 2013, when the mar­ket was at the same level as that of 1989 and 1990, the in­dex has soared over the last few months and man­aged to add 6 bil­lion eu­ros to its cap­i­tal­iza­tion within just the first five ses­sions of 2014.

Stock­bro­kers de­scribe this as tech­ni­cal growth, re­ly­ing partly on ex­pec­ta­tions for the pri­va­ti­za­tions to take place this year in the pro­gram of state sell-off fund TAIPED. Fi­nance Min­is­ter Yan­nis Stournaras’s state­ment this week that the coun­try will tap the money mar­kets in the sec­ond half of the year, is­su­ing five-year bonds for the first time since be­ing priced out four years ago, has also cre­ated a fa­vor­able at­mos­phere among Greek and

to the money mar­kets later this year send a sig­nal to for­eign port­fo­lios to se­cure hold­ings in Greek stocks and bonds, as most val­u­a­tions re­main at low lev­els. for­eign in­vestors.

Another fac­tor that has pushed stock prices up has been the en­try of hedge funds (with over 240 es­ti­mated to be present in the lo­cal mar­ket) in a small group of listed com­pa­nies. Th­ese are blue chips that ei­ther have a com­par­a­tive ad­van­tage in the do­mes­tic mar­ket due to their ac­tiv­ity – such as PPC, OTE, OPAP and Hel­lenic Petroleum – or whose ac­tiv­ity is mostly con­ducted abroad and which are not af­fected by the lo­cal econ­omy.

Manos Hatzi­dakis, chief an­a­lyst at Beta stock­bro­kers, ex­plained to Kathimerini that the rise is tech­ni­cal as it has been cul­ti­vated while the fis­cal fig­ures of the coun­try ap­pear im­proved. At the same time, ac­cord­ing to Hatzi­dakis, the ex­pec­ta­tion that Greece will re­turn to the money mar­kets sends a sig­nal to for­eign port­fo­lios to se­cure hold­ings in Greek stocks and bonds as most val­u­a­tions are still at low lev­els.

The re­cent bourse rise has also fac­tored in the pub­li­ca­tion of the Black­Rock re­port re­gard­ing the stress tests on lo­cal banks, ex­pected within Jan­uary, putting an end to ru­mors about the ex­tent of the banks’ cap­i­tal needs for 2014. Bro­ker­age com­pa­nies are of the opin­ion that the pub­li­ca­tion of the re­port will set­tle the mar­ket. In­vestors are also bet­ting on a pos­i­tive con­clu­sion to Eurobank’s share cap­i­tal in­crease in the next cou­ple of months.

An­a­lysts warn how­ever that the mar­ket faces an im­por­tant ob­sta­cle this year, and that is the re­sults of the Euro­pean and lo­cal elec­tions in May.

Nikos Kafkas, also of Beta stock­bro­kers, notes that most pur­chase or­ders come in from abroad and head to spe­cific stocks. “Sev­eral val­u­a­tions on FTSE-25 blue chips have started show­ing a ma­jor rise, which means that a pos­si­ble neg­a­tive event in the fu­ture would lead to con­sid­er­able sales,” he warns, adding that “even over the course of in­di­vid­ual ses­sions there are liq­ui­da­tions made that con­sti­tute tech­ni­cal moves to reg­is­ter tem­po­rary gains be­fore funds are placed again at lower lev­els.”

Pes­simists stress that the drop in bank de­posits and the in­crease in ex­pired debts have cre­ated a tech­ni­cal bliss in the mar­ket which could be re­versed at any mo­ment, send­ing the bourse to con­sid­er­ably lower lev­els.

Newspapers in English

Newspapers from Greece

© PressReader. All rights reserved.