Olympics Games seen providing an added boost to Athens bourse

The Olympic Games are an event of global dimensions which bolsters Greece’s weight on the international scene, creates business opportunities and leaves behind a huge pool of know-how and infrastructure projects, says Giorgos Ventouratos, managing director of Diolkos Asset Management. The ultimate weapon for propelling the economy forward, however, is entrepreneurship, he adds, and this requires a simple and stable framework with favorable conditions. «In a healthy economy, it is enterprises that must set the pace. Entrepreneurs undertake business risks with a view to making a profit, and this creates real – rather than subsidized – jobs. For this to happen, the government does not need to bring forward any new ideas or new measures, or spin any new moves, but introduce a simple and stable framework with equal opportunities for all, low and fair taxation and promote a friendly attitude toward entrepreneurs, big and small, on the part of the State. I believe that if these things are realized, there will be an explosion of entrepreneurship in Greece which will surprise everyone,» he says. Ventouratos is also optimistic regarding stock market prospects. «The sudden surge of markets after the first quarter of 2003 was certainly a technical reaction to some degree; subsequently, however, this rise was bolstered by positive developments at both macroeconomic level and by firms’ improving fundamentals. Problems are still there, most importantly the huge deficit of the American economy, which essentially consumes money borrowed from third countries. But the crisis of 2001-2002 was one of the worst and turned many investors away from the stock markets, creating the potential for significant investment opportunities to arise. A corollary was the overvaluation of other types of securities, such as bonds, whose returns are now very low.» High liquidity Ventouratos argues that investors must understand that there is a huge quantity of funds circulating freely in the global economic system in the search of investment opportunities. In recent years, this money has grown significantly, on the one hand because of credit expansion and, on the other, due to the policies of central banks which, trying to prevent a global recession, fed the system with liquidity. «Whether this liquidity is healthy or not, the fact remains that in a global economic and investment environment much freer than in other days, it will find outlets for placement around the world, either boosting some form of economic activity and ultimately causing inflation, or being directed to stock markets and pushing share prices up.» His optimism includes the prospects of the Athens Stock Exchange (ASE). «The last exodus of foreign investors from the ASE took place in May 2001, when its upgrading into a mature market by Morgan Stanley Capital International caused a reshuffling of foreign institutional portfolios. This was followed by a global stock market slump, which naturally made foreign investors focus on their own problems and caused their interest in regional markets, such as the ASE, to abate. «Following a long period of absence, foreign investors reappeared on the Greek stock market after the first quarter of 2003. It is not a coincidence that the rise of 2003 was mainly fueled by large capitalization stocks and the great ease with which the big placements of banks’ own shares were absorbed. Therefore, the presence of foreign portfolios in the domestic stock market today is important and their influence crucial. As long as we do not have any upheavals and the positive climate is maintained globally, I believe that the Olympic Games will help spur foreign placements in the ASE and we could see the general index recapture the 3,000-point level, which it [last] held in May 2001.» Referring to other matters, Ventouratos notes that procedures for the listing of companies on the ASE are too cumbersome and have a negative influence on the growth of the institution. Diolkos applied for listing in June 2001 and is still waiting. Besides additional costs due to the need to update application files, such delays also deprive the market of capital and lead firms to follow conservative investment policies, he says.