Diethniki, the mutual funds subsidiary of the National Bank of Greece (NBG) and a market leader, takes a upbeat view of the prospects of the global and domestic economies. On condition of no adverse developments and given the overall positive picture of nine-month results of listed firms so far, Diethniki officials consider it very likely that the general index of the Athens Stock Exchange (ASE) can approach the level of 2,300 points by the end of the year (it closed at 2,163.47 yesterday). The outlook for the global economy appears particularly positive in the first half of 2004; a marked characteristic of the current period is a shift of investment choices toward stocks and the assumption of greater risk. The Greek economy is projected to continue growing at a much faster rate than its eurozone partners next year (4.2 percent against 1.1 percent). The difference is mainly due to the large number of big projects being subsidized under the European Union’s Third Community Support Framework and for the Olympics. According to Diethniki, these factors bode well for the business climate and disposable incomes, which in turn will lead to stronger demand and better prospects for investment next year. Good time for stocks The ASE’s general index has gained 25.4 percent since the beginning of the year and 49.5 percent since its lowest ebb on March 31 (1,467.30 points). By the end of the month, all listed companies are expected to have announced nine-month results, including the heavyweight blue chips OTE, CosmOTE, Vodafone-Panafon and Public Power Corporation, with good expectations. The market is projected to rise further in 2004 and the expected global economic recovery will offer a further boost. The price valuations of Greek stocks continue to be attractive compared to European ones – an estimated 15 percent cheaper. Diethniki favors the stocks of companies whose sales and operating profitability are projected to rise by more than 10 percent. Such are to be found in the sectors of retail commerce, mobile telephony, cement, construction, gaming and banks. The euro The dollar/euro parity has been around 1.14-1.15 in the last two weeks. In the short-term this is projected to hover in the range between 1.14 and 1.19, as a weaker dollar helps the US economy recover, making American products and services more competitive and lifting production, investment and employment. Conversely, it also makes eurozone products less competitive, helps bring inflation down in countries with a strong export sector such as Germany and increases the leeway of the European Central Bank for a more lax monetary policy. In six months, the dollar/euro parity is forecast at around 1.18-1.19 and toward the end of 2004 at more than 1.25, perhaps even 1.28. Diethniki has a 25 percent Greek market share, with 7.5 trillion euros under management in 20 mutual funds named Delos.