Gov’t eyes common platform with regional stock markets

The Economy and Finance Ministry is promoting the creation of a common trading platform for stock exchanges of Mediterranean and Eastern European countries, based on the Athens bourse (ASE), sources say. The plan, which last week involved a visit by ASE President Spyros Kapralos to Nicosia and Bucharest, aims at attracting investors from the economies of the two regions. The platform will include selected stocks from each bourse that agrees to participate. The plan comes at a time when discussions on merging bourses are gathering focus, on top of given interest by governments to cut long-term stock market transactions. The ASE is seen as having the advantage of being one of the most organized – at an institutional level – regional stock markets and as being able to offer know-how toward the creation of the platform. Economy and Finance Minister Giorgos Alogoskoufis’s recent signing of an agreement with Cyprus to that effect indicates the especial importance that Greece ascribes to the island republic’s bourse in the scheme. The Cyprus Stock Exchange (CSE) has comparatively high liquidity, approaching 2 billion Cyprus pounds (3.4 billion euros). During Kapralos’s visit to Nicosia, a joint statement said that the two countries’ stock market entities, recognizing the need for facilitating bilateral accessibility, would submit a draft plan for the creation of a common platform to their respective boards of governors. According to the draft, the platform would be aimed at creating a homogenous, profitable and efficient environment for the conducting and clearing of transactions, as well as bringing about reductions in the operating costs of the two bourses by tapping economies of scale and lowering transaction costs. Moreover, the plan is aimed at promoting further collaboration and initiatives for the growth of business in the two markets, with a view to attracting the participation of other regional bourses. The timetable agreed upon envisages the common platform to become operational by the last quarter of 2005. «We are particularly happy that an effort that began some time ago will yield fruit within 2005 and will help us achieve the goal of a single market in the broader region,» said Kapralos. “For the Cyprus Stock Exchange, this agreement signals a new era in which it is being called upon to meet the increased requirements of the Cyprus economy within united Europe,» said CSE President Akis Kleanthous. High foreign share Nevertheless, the role of foreign institutional investors in the ASE remains strong. According to data issued by the Central Securities Depositary, foreign investors account for 37.55 percent of the ASE’s total capitalization, 44.19 percent of the blue chip FTSE/ASE 20 capitalization, with their share on an upward trend. The respective shares were 36.09 and 41.89 percent in January. The activity of Greek investors remains subdued, with 47.51 percent of them holding just one stock in their accounts.

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