Market takes poor view of new ASE draft regulations

The new draft operating regulations for the Athens Stock Exchange (ASE), announced this week, seem to have created skepticism and concern rather than satisfaction among stockbrokers and market players. The common view was that the institutional framework was already in fine shape and that the additions regularly announced do not help the consolidation of any positive climate in a market trying to recover its strength after the recent successive block placements of heavyweight banks, such as Alpha, National, Piraeus and Eurobank. Stockbrokers complain about low turnover, businesspeople about lack of marketability and investors are discouraged by the market’s ups and downs over the last six months. Moreover, the country has effectively entered a pre-election period, which is bound to slow down the public sector and affect psychology in the private sector, leading firms to postpone important decisions. The new draft regulation provides for the creation of new categories of listed firms, sets new capital requirements for listing and introduces new rules for the stocks placed under supervision, which now may even be struck off the list. Minimum requirements of shareholders’ equity are set for listing on the main and parallel markets and stocks are now divided into three categories: general (industrial), services and commercial. New categories It is proposed that two new special categories be formed, that of Financial Fluctuation (part of the Under Supervision category today) and that of Special Trading Prerequisites (regarding price, dispersion and marketability). The categories of Under Supervision and Low Productive Activity remain, but the Low Liquidity category is abolished. Maximum staying times are provided for each of these four special categories as well as specific requirements for their deletion. Chairman of the Stockbrokers Association (SMEHA) Panayiotis Voilis said he will have to study the draft in order to form an opinion but he considers that one more set of measures will not help in dealing with the market’s essential and chronic problem, which is lack of credibility. Regarding the provisions for striking stocks off the bourse, in particular, he holds the view that they will most likely not be applied for reasons of political cost. University of Piraeus Professor Michalis Glezakos said the proposed new regulation is a step in in the right direction and sends a message that the bourse has set out to attract large enterprises. Merit Securities Managing Director Emmanuel Varsos says the market has been over-regulated in recent years and that its main problems are lack of liquidity and that it has lost its appeal. He adds that the market must find new momentum in order to tap in to the positive climate abroad.