Greek bank rout unabated
GREEK bank shares sold off sharply for the third day in a row yesterday, with buyers yet to emerge on a scale large enough to counter dumping of the stocks.
The losses — which follow a 50% plunge in the bank subindex over the previous two sessions — dragged down the wider Athens market, where nonfinancial shares were generally outperforming banks.
The bank sector share index was down 27.5%, closing in on the near 30% dives seen on both Monday and Tuesday, with millions of shares offered and no bids after early deals.
Shares of Alpha Bank and Piraeus effectively hit the daily loss limit of 30%, with Eurobank down 26.7% and National Bank falling 26.6%. More than 8-million shares in Alpha and 2.6-million shares in Piraeus were being offered for sale, with no bids seen.
“So far buyers have not been keen to step in and try to catch a falling knife,” investment adviser Theodore Mouratidis said. “There’s a lot of automated selling (and) there is uncertainty in view of stress tests that will determine the size of banks’ capital shortfalls.”
Greek banks are in dire need of recapitalisation after a flight of euros from deposits for most of this year and mounting loan impairments. But that will hurt existing shareholders, when it comes, by diluting the value of their holdings.
Banks make up about 20% of the main Athens index and their continued plunge dragged it 3.6% lower after a small opening gain.
The new price levels meant big losses for bank shareholders, including Greek rescue fund HFSF, which has majority stakes in three of the four big lenders, hedge funds and other longterm foreign investors.
Foreign market participants accounted for 67% of stock market turnover on Tuesday, a senior Athens stock exchange official said.
Some shares in the bourse’s large-cap share index were rebounding, however, with 11 of its 25 constituent stocks scoring gains yesterday.
“The market is looking for the bottom. We are not far away from it,” said Alexander Moraitakis, head of Athens-based Nuntius Securities.