Construction shares disappoint, despite bright prospects

Even though the construction sector fared relatively well on the ASE, few investors were satisfied, given its great prospects. The construction subindex dropped 9.57 percent in 2001, easily outperforming the general index. Eight stocks showed gains and 27 declined. Of the latter, 18 registered losses of over 20 percent. Disappointment is palpable, given the fact that the sector is undergoing a period of huge expansion. The construction of so many infrastructure projects, all partly financed by the European Union, the needs of the Olympic Games and the expansion of so many construction firms into activities such as real estate development and renewable energy sources had created great expectations in the market. These expectations were not met, either through the stock market or in the companies’ own financial results. One is left wandering what will happen to the sector once the exceptional circumstances that have supported the construction boom no longer apply. The relatively good showing of the construction index is due to a handful of firms – Aktor, Avax, and Aegek, whose shares ended with gains in 2001, as well as Hellenic Technodomiki, whose stock was stagnant. On the other hand, one finds companies such as Domiki Kritis, which lost 51.19 percent. This loss leader was followed by TEV (46.70 percent), Alte (42.91 percent), Atti-kat (41.28 percent), Gnomon (39.68 percent), Vioter (37.48 percent), Ergas (37.34 percent) and Atemke (33.78 percent). Investment firms ended the year down 42.67 percent, almost double the general index’s losses. They were still paying for the overheating of the market in 1999. Their results took a dramatic downturn, with most of them registering big losses from their investments on the stock market.