Foreign investors will not face restrictions on operations when trade resumes at Greece’s stock exchange on Monday, following a five-week shutdown caused by capital controls, a stock exchange spokeswoman said, while volatility limits would remain unchanged at 30 percent and all shares would be traded, including banking stocks. Local investors will face restrictions aimed at stemming capital flight, she added.
The Athens Stock Exchange (ATHEX) has been shut since June 29, when the government closed banks and imposed strict limits on withdrawals and foreign transfers to avert a run on deposits.
The Finance Ministry cleared the way for the exchange to resume operations by issuing a decree setting out new trading rules for local investors. “After the finance minister signed the relevant decree [on Friday], the Athens Stock Exchange board … decided to reopen the markets of Athens Stock Exchange on Monday, August 3,” the spokeswoman said.
Under the European Central Bank-approved plan, local investors will be allowed to buy shares with existing cash holdings, but not to withdraw money from their Greek bank accounts to buy shares. Some market participants had warned that unlimited trading for domestic investors would have posed a serious risk for lenders by accelerating capital outflows.
Local brokerages, however, criticized the curb on the use of local bank deposits for buying securities, saying it risked distorting the market. “We strongly oppose any capital controls related to the use of existing funds deposited in the Greek banking system,” the Association of Members of the Athens Exchange (SMEHA) said in a statement.
“The restrictions imposed only on the transactions of purchase of securities, while leaving the transactions of sales free and unrestricted, will clearly favor the sales rather than the purchases of financial instruments thus creating market imbalance,” it added.