(MENAFN- The Peninsula) Greece's stock market closed with heavy losses yesterday after a five-week shutdown brought on by fears the country was about to be dumped from the euro zone.
Bank shares fell 30 percent before loss-limits kicked in to stop investors selling any more.
The main Athens stock index ended down 16.2 percent, recovering slightly after plunging nearly 23 percent at the open. It was the worst daily performance since at least 1985 when modern records began, including a 15 percent fall when Wall Street crashed in 1987.
By contrast, the broad European FTSEurofirst 300 index was in positive territory for the day. "The market tanked, as expected," said Takis Zamanis, chief trader at Athens-based Beta Securities.
Banking shares, which make up about 20 percent of the Greece index, were particularly hard hit. The overall banking index was down to its 30 percent daily limit.
All five shares comprising the index - National Bank of Greece, Alpha Bank, Piraeus Bank, Attica Bank and Eurobank - were locked down for much of the session at the limit with no buyers.
Greece's banks have seen deposits severely depleted as Greeks pulled out their euros for fear they would be forcibly converted into a new drachma outside the euro zone. The banks have been propped up by emergency money from the European Central Bank.
Traders said they expected more bank-share losses in the next session. "Bank shares look like they have more room to slide on Tuesday before bids emerge," said one fund manager, who declined to be named.
"It will take a few days for the market to balance out." Some companies outperformed, mainly those with exposure abroad, although they still fell.
"Buyers emerged for non-bank stocks, blue chips like OTE Telecom and (gaming group) OPAP, which shows that there is buying interest out there," Zamanis said.
There were only nine gainers, mainly small caps and with very small volume, exaggerating the moves. One, furniture maker Dromeas SA, gained almost 29 percent after clinching a ¤30m deal to supply European Commission offices.
Trading on the Athens bourse was suspended in late June as part of capital controls imposed to stem a debilitating outflow of euros that threatened to collapse Greece's banks and hurl the indebted country out of the euro zone.
Since then, Athens has agreed a framework bailout plan with its European Union partners in exchange for stringent reforms and budget austerity.
But implementation of the deal is some way off, keeping alive the threat of political and economic instability. There is also concern that Prime Minister Alexis Tsipras may need to call a snap election. Yesterday's losses stemmed from a number of reasons. Negotiations on the new bailout might bog down, for example, leaving the government and banks perilously short of cash. A report on Sunday in the newspaper Avgi, which is close to Syriza, said the government was seeking ¤24bn ($26.37bn) in a first tranche of bailout aid from international lenders in August. Of this, the newspaper said, ¤10 bn was earmarked for an initial recapitalisation of Greek banks, ¤7.16bn to repay an emergency bridge loan and ¤3.2bn to repay Greek bonds held by the European Central Bank and others.
Reuters
Pension reforms from July
ATHENS: Greece and its lenders discussing a third multi-billion-euro bailout deal have agreed that pension reforms will affect only those who retired after the end of June, labour ministry officials said. When creditors agreed in July to negotiate a deal aimed at keeping it afloat and in the euro zone, Greece committed to implementing major reforms, such as scrapping early retirement, by the end of October.
Lenders want, for example, an increase in the retirement age to 67 from the nominal 62 that falls significantly depending on the number of years worked and family status.
The bailout, worth up to 86 billion euros (dollars), needs to be settled by August 20 if Greece is to pay off debt of ¤3.5bn to the European Central Bank that matures that day.
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