ECONOMY

Bourse planning to clear out listed ghost companies

This year has proved to be one of the most disastrous in the history of the Greek bourse, as the majority of stocks have dropped to historic lows.

The Capital Market Commission has already decided that in the first half of 2012 it will rid the stock list of ghost companies that are inactive and have trapped thousands of small investors for years.

The head of the Commission, Costas Botopoulos, is set to call a broad meeting of all groups in the market this week, aiming to have all parties involved in the bourse table their proposals for incentives to be given to firms whose stocks are destined to cease trading.

The Athens Exchange is certain to shrink in the new financial year as, in its current form, it cannot possibly continue with 265 listed companies, out of which 188 are in the main market, 35 under supervision, 23 suspended, 16 trading in the ?low dispersion? category, and three are in the new category – ?for delisting.?

Since 2010 the administration of the Athens Exchange has identified 19 listed firms that are are now being monitored due to their low annual turnover and marketability. Unless such stocks are able to show some sign of improvement, their presence on the Greek bourse cannot be justified.

Athens Exchange president Sokratis Lazaridis has stated that ?the stock market cannot indefinitely tolerate enterprises with a particularly low turnover, which in many cases proves to serve other purposes. Our patience is wearing thin and we wish to have healthy companies on the bourse as we would rather have fewer companies listed but with good financial data than a bigger number of listed companies with serious financial problems.?

According to analysts, the 10 listed firms that are already in the red zone based on their low turnover, as recorded in their third-quarter accounting data, are the following: Balkan, Elviemek, Kekrops, Allatini Ceramics, REDS, Klonatex, Emporikos Desmos, Zamba, Microland Computers and AEGEK.

The stock market?s administration will help those listed companies by recommending ways for them to take their annual turnover over 2 million euros, although it is clear that in the current economic climate it will be very difficult for a firm to boost turnover unless it is involved in exports.

The virtuous circle of delisting stocks with serious financial problems started in May 2004. The main issue for the problematic stocks on the Athens board is that being listed is a luxury that they cannot afford owing to the high lease rate they pay annually as they have been loss-making companies for at least the last five years.

However, it appears that everyone in the stock community does accept that a market that has returned to prices unseen since 1992 cannot sustain such a high number of listed companies.