Huge outflow expected from MSCI index

There seems to be no end to the pressure on Greek bank stocks, as despite the Greek authorities seeking ways to address the problem of bad loans, the four systemic lenders have seen their capitalization cut in half since the start of the year.

After yesterday’s mini sell-off at Athinon Avenue, the capitalization of Piraeus Bank shares dropped to just 423 million euros. Piraeus’s fall below the 500-million-euro mark was the reason for the decision to remove it from the MSCI Standard Greece index at the end of November.

National Bank is worth just 956 million euros, while Eurobank is now at 1.03 billion. Even Alpha, which will remain in the MSCI index, has seen its capitalization slump from 8.7 billion at the beginning of the year to just 4.2 billion euros yesterday.

This fresh assault on bank stocks was triggered by Wood & Company’s updated forecasts for total outflows from the MSCI Greece index after Piraeus, National and Eurobank are ejected: It now expects that amount to come to $211 million, one of the biggest among the 24 MSCI indexes in emerging markets. The outflow is expected to hurt the stock of Eurobank hardest, whose capitalization is projected to shrink by $104.4 million.