ECONOMY

The lackluster stock market

The first-quarter results of firms listed on the Athens Stock Exchange have brought no surprises. Banks showed a significant improvement in profitability, lifting the average, but the rest of the market performed less impressively. It seems that most firms are still continuing efforts to put finances back on a sound footing, helped by low interest rates in rescheduling debts and by cutting costs. All this goes toward productivity improvements but it is clear that the trend is vulnerable to possible interest rate rises, or a sustained high level of fuel prices. It is worth noting that despite the difficult period of the last two years for many firms, there have been very few business deals with mergers and acquisitions. This means that either the difficulties were not significant enough to induce businessmen to revise estimates of their firms’ value or that these firms have indeed no real value and can therefore attract no buyers, even at a low price. This hazy scene forms the substance of the lackluster state of business in Greece. The effects of the stock market crisis have not been cleansed, becoming chronic. The market offers no solutions, so problems are bypassed and postponed, while temporary solutions are cooked up. Any serious developments and business deals that might redraw the market «map» can only happen when the market is buoyant and firms’ shares acquire some value. Perhaps this is why the market is not capitalizing on the prospects offered by the Olympic Games. The Athens Games seem destined to go down in history as among the few that were not accompanied by a rise in the stock market. Some foreign institutionals seem to have taken positions in good time, in order to sell at higher prices to the latecomers, but these never arrived. The so-called «smart money» that usually shows the way is going through a crisis: It has been left without customers.