Will bullish trend last?

Shares rallied last week, with continued strong buying interest in blue chips by foreign institutionals. The Athens Stock Exchange (ASE) general index gained 5.89 percent, closing at 2,635.81 points on Friday, recovering a level last achieved in January 2002. Turnover, including block trades, shot up to 1,004 million euros – amounting to an average per session of 200.85 million euros. Of the Financial Times indices, the blue chip 20 ended 6.91 percent higher and the Mid-Cap 40 advanced 4.91 percent, while the Small-Cap 80 gained 4.06 percent. All sectoral indices moved higher, led by printing-publishing with 12.09 percent, which was followed by basic metals (9.52 percent), insurance (8.98 percent) and banks (8.76 percent). Advancers beat decliners 298 to 40, with 30 remaining unchanged. Unibrain outperformed, with weekly gains of 39.60 percent, followed by Eurofarm (34.72 percent). Euromedica and Ippotours led the decliners. The most marketable securities were Alpha Bank, which gained 12.64 percent, OTE telecoms, and mobile subsidiary CosmOTE. Analysts attributed part of the rally to the government’s announcement of a reduction in corporate taxes to 32 percent in 2005, the prospects for a restructuring plan in OTE telecoms and other private groups, a realignment of the banking map, and a speeding-up of the privatizations program. They point out that Alpha Bank has postponed its plan for the absorption of IT subsidiary Delta Singular to 2005. Nevertheless, the analysts caution that the rally cannot be devoid of speculative tendencies that are inevitable in a bullish market, and which may lead to a correction.