Big rebound for Greek securities

Greek securities recovered on Friday about half of the ground lost over the previous three days in a spectacular rebound in both stock and bond prices that was fueled by a combination of factors in the context of a general resurgence of European markets.

The Athens Exchange (ATHEX) general index ended at 931.81 points, soaring 7.21 percent from Thursday’s closing of 869.16 points. The large-cap FTSE/ATHEX 25 index expanded 7.34 percent, ending at 303.31 points.

Statements of support by European Central Bank officials resulted in markets bouncing back across the continent, while Greek stocks were also buoyed by Prime Minister Antonis Samaras’s statement confirming that Athens is negotiating a precautionary credit line with its lenders. And of course many buyers moved to take advantage of the situation following the big sell-off of Greek stocks from Tuesday to Thursday.

As a result, after three days of losses which came to more than 13 percent for the benchmark, the drop was contained to 7.27 percent on a weekly basis.

Seven blue chips posted a daily rise of more than 10 percent, led by OTE, which gained 12.87 percent, and Folli Follie, which climbed 12.72 percent.

In total 114 stocks reported gains, 26 suffered losses and eight remained unchanged.

Turnover reached 228.8 million euros, up from Thursday’s 223.6 million.

Greek bonds also rallied, following the biggest two-day rise in yields since mid-2012 with the biggest one-day fall since the same period. Greece’s 10-year yield tumbled 92 basis points on Friday to 8.04 percent, cutting the weekly increase to 144 basis points, the most since May 2012.

Earlier in the day it had risen to 9.33 percent, the highest since January 17, putting the government’s plan for relying on market funding at great risk.

“With bond yields at 9 percent, an exit strategy is just not possible,” Michel Danechi, portfolio manager at EI Sturdza’s Strategic Emerging Europe Fund, told Reuters.

“When they can raise money at 4-5 percent, they can talk of exiting the IMF program, but now it is not realistic,” added Danechi, whose fund owns Greek bonds.

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