ECONOMY

ASE falls further in 2002

The year 2002 was an annus horribilis for stock investors and companies seeking to raise capital from the stock market. Not only did the equity market lose close to a third of its value, listed companies only managed to pull 1.26 billion euros from investors, an 89 percent decline from two years ago, the Capital Market Commission said in its annual report on the Athens Stock Exchange released yesterday. The stock market slump, in Greece and abroad, has its roots in the general economic downturn, the corporate scandals in the USA, the bursting of the bubble in the 1990s and rising tension in Iraq, said Stavros Thomadakis, president of the capital market regulator. «All these factors sapped investors’ confidence,» he said. The ASE benchmark index shed 32.5 percent last year to close at 1,748.4 points, a major fall from a peak of 6.355.04 points at the height of the bubble in September 1999. Its market capitalization fell by a similar margin – 32.2 percent – to 65.76 billion euros. Daily average turnover declined by 38.1 percent to 100.3 million euros. The stock market malaise also put paid to companies’ hopes of expansion and investments. There were only 20 initial public offerings, which raised 966 million euros, while only five companies launched capital increases amounting to 257.7 million euros. Taking advantage of the activity slowdown, the Commission sought to clamp down on irregularities and market abuses last year, levying a total of 27 million euros on 204 offending companies and individuals. Thomadakis said measures to increase corporate transparency, such as the introduction of a code of behavior and International Accounting Standards for listed companies as well as corporate governance principles, will create the foundation for a healthy market.