ASE looks forward to better news

The last trading week of August in the Athens Stock Exchange (ASE) was marked by a wave of liquidations of blue chip and mid-cap holdings, as investors cashed in gains realized in the previous three weeks when the ASE general index climbed to a new four-year high. It closed the week 3.15 percent lower. ASE’s correction was in line with the general trend of bourses elsewhere in Europe. which were affected by worries about the galloping price of oil. Greece is one of Europe’s most energy-consuming nations and has one of the highest degrees of dependence on oil, in good measure because of the large number of glass-fronted buildings which require large amounts of energy to heat and cool. Nevertheless, the Greek stock market appears to remain cool and optimistic in anticipation of first-half results, especially by banks, telecom and industrial companies and commercial enterprises with a high degree of dependence on exports. Greek and foreign investors also hope to hear Prime Minister Costas Karamanlis announce an even bolder privatization program in his keynote economic policy speech at the opening of the Thessaloniki International Fair on September 9. This was undoubtedly a strong contributing factor to the euphoria which propelled the ASE index to above 3,300 points in the last three weeks. The gradual announcement of first-half results under International Financial Reporting Standards also fueled selective placements. Further, analysts note that the positive climate in the stock market has been additionally bolstered by last month’s successful flotation of the fourth tranche of gaming firm OPAP, the largest ever in Greece, as well as the continued presence of foreign institutionals in the Greek market and the overall confidence, which the government seems to enjoy among the business community, that it will continue its administrative and structural reforms in the public sector. This, in turn, helps the government’s plans to sell further chunks in coming months of other large public holdings, such as of main-line telecoms operator OTE, the Public Power Corporation and Emporiki Bank, as well as the listing of Athens International Airport and the Postal Savings Bank.