Greek stock market to reopen tomorrow, limits on local investors
ATHENS (Reuters) – Greece’s stock market will reopen on Monday after a fiveweek shutdown caused by capital controls, but local investors will face restrictions aimed at stemming capital flight, a bourse spokeswoman said on Friday.
The Athens Stock Exchange has been shut since June 29, when the government closed banks and imposed strict limits on withdrawals and foreign transfers to avert a run on deposits.
The Finance Ministry cleared the way for the exchange to resume operations by issuing a decree setting out new trading rules for local investors. There will be no restrictions on foreign investors.
“After the finance minister signed the relevant decree earlier today, the Athens Stock Exchange board... decided to reopen the markets of Athens Stock Exchange on Monday, August 3,” the spokeswoman said.
Traders and exchange officials had hoped the exchange would be able to reopen last week after the European Central Bank gave Greece the green light to allow normal operations by foreign investors, with some limits for local investors.
Under the ECB-approved plan, local investors will be allowed to buy shares with existing cash holdings, but not to withdraw money from their Greek bank accounts to buy shares.
Some market participants had warned that unlimited trading for domestic investors would have posed a serious risk for lenders by accelerating capital outflows.
Local brokerages, however, criticized the curb on the use of local bank deposits for buying securities, saying it risked distorting the market.
“We strongly oppose any capital controls related to the use of existing funds deposited in the Hellenic banking system,” the Association of Members of the Athens Exchange said.
“The restrictions imposed only on the transactions of purchase of securities, while leaving the transactions of sales free and unrestricted, will clearly favor the sales rather than the purchases of financial instruments thus creating market imbalance,” it added.
Trading in all stocks including banking shares will be allowed and volatility limits will remain unchanged at 30 percent, the bourse spokeswoman said.
Technical glitches at local banks, which will be required to enforce the trading restrictions, had further complicated the exchange’s reopening and many securities traders took an early summer holiday during the closure.