The Athens Stock Exchange seems to be resisting the holiday mood. The general index has been flirting with the 3,300-point level in the last two weeks, having advanced about 400 points this season. The index has gained 18.35 percent since the start of the year, led by blue chips, whose FTSE/ASE 20 index stands 19.03 percent higher, mainly on the strengthening of telecoms stocks (up 20.19 percent) and banks (16.66 percent). However, the positive sentiment has spread to a number of middle capitalizations, which have recorded significant gains. The FTSE/ASE Midcap-40 index has risen 20.49 percent this year and interest continues to be strong. Analysts are optimistic about prospects, drawing attention to the government’s planned structural changes in the economy, privatizations, merger and acquisition activity in the works, improved profitability, strong interest by foreign investors and a positive climate abroad. The solution to the banks’ pension fund issue and the liberalization of working hours add optimism about the government’s resolve to pursue further reforms. The former also clears the way for restructuring in the banking sector. Emporiki Bank looks certain to change hands, despite the fact that France’s Credit Agricole, now holding 11 percent, has still not made it clear whether it will exercise the right of first refusal. This change is also sure to create chain reactions, as smaller banks will need to form bigger schemes in order to survive. On the privatization front, the government is expected to sell a further 11 percent stake in OTE telecoms, while it is preparing to float part of Postal Savings Bank (TT) on the bourse and new tranches of utilities such as the Piraeus Port Authority. The success of the recent public offering of gaming and betting firm OPAP – the biggest ever in Greece – the oversubscribing by two times of Emporiki Bank shares within only two hours of their offering, and strong interest by foreign investors in Piraeus Bank shares are seen as sure indicators of the upbeat mood. Nevertheless, many analysts appear particularly guarded, warning that the prices of many shares are already high. They also point out that the index has been on an uphill course, without having undergone substantial correction, for several months. Some of them are even talking of a bubble. Further concern is created by the possibility that continued terrorist activity may destabilize global markets. High dividends Athens bourse-listed companies this year on the whole distributed higher dividends. A total of 204 out of the 370 listed firms paid out dividends, including 21 which did not do so last year; 97 paid out higher dividends, 34 stayed on the same level, while 52 gave shareholders lower returns. The Bank of Greece, with 2.85 euros per share, and Hellenic Exchanges, with 2.25 euros per share, topped the ranks.