ECONOMY

ASE stays strong but low turnover is Achilles’ heel

At the end of the third week of April the Athens Stock Exchange remained among the best performing of western European markets. Since the beginning of the year the ASE General Index shows a gain of 4.03 percent, while the Frankfurt market is down by 1.47 percent, Paris is up by 3.40 percent and the FTSE index in London is up by just 0.11 percent. In New York, Dow Jones has lost 5.23 percent, the S&P 500 is down 4.29 percent and Nasdaq has lost a hefty 9.79 percent. The improvement in the Greek market’s climate, keeping within a whisker of the 3,000-point level of the index, is attributed to reports that a solution to the banks’ social security problem is about to materialize. Further, the draft bill on the operation of the stock market, unveiled this week, will relieve the market of past burdens and create new categories based on healthy and developing companies. This week we also had presentations by listed companies from the FTSE-20 and Mid-Cap 40 indexes in London and Athens by big international investment firms. The results are encouraging, as Capital Market Commission President Alexis Pilavios confirmed after visiting the UK capital. There he stated the rather obvious, that international investors are interested in the Greek stock market when there is sufficient marketability and they can find stocks, buy and sell during trading. Pilavios added that ASE is particularly competitive regarding the low cost of transactions, and stressed that for the positive climate to remain the daily transaction turnover must stay at least at 150 million euros. Next week being Easter Week, we may well not see a rise in turnover, although this year there is a peculiarity: The market moves from orders from abroad, so overall transaction activity is not expected to decline greatly as foreign portfolios will seek to consolidate their positions mainly in blue chips and low caps. Looking ahead, the accounting reports for the first half of 2005, to be published by August 31, will determine whether several companies will remain listed or not, as they will include for the first time the reports by registered accountants according to the International Financial Reporting Standards.