Athens Stock Exchange remains one of the most insular of European bourses

Almost nine months after its upgrade to mature market status by Morgan Stanley Capital International (MSCI), the Athens Stock Exchange (ASE) continues to trail other bourses in Europe in terms of its «internationalization» and exposure to foreign capital. Its «introversion» is considered a major handicap, largely responsible for the low volumes of trading in which it seems to have become bogged down. According to data from the European Federation of Stock Exchanges (FESE), ASE is particularly weak in attracting foreign firms, and investment in general, even though stock placements on ASE are non-negligible. ASE ranks fifth among 19 European bourses in the number of companies listed, with 332, while Milan has 294, Lisbon 99, Stockholm 305, Vienna 113, Copenhagen 217 and Dublin 87. Despite the high number, ASE only lists one foreign firm, the Bank of Cyprus, while Copenhagen lists 9, Helsinki 3, Dublin 19, Lisbon 2, Madrid 21, Stockholm 20, Zurich 149, Frankfurt 235, London 453 and Luxembourg 209. Indeed, far from seeking to establish themselves in Greece, foreign firms have been showing a tendency to withdraw. This is related to a lack of incentives, troublesome red tape, the lack of stable market operating rules, the extensive presence of the State in the economy, a dysfunctional and ineffective public administration. The ASE has not managed to tap the country’s strategic role in the broader region. Characteristically, the Greek Emerging Capital Markets Exchange (EAGAK) exists only on paper, an entire five years after its inception. On the other hand, foreign investment in Greek stocks fares much better. According to figures released on Tuesday, foreign private and institutional investors owned 23.8 percent of Greek stocks at end-January and approximately 32 percent of the total capitalization of blue chips which constitute the FTSE/ASE-20 index. The current value of foreign placements on Greek stocks amounts to 21.8 billion euros, when the total capitalization stands at 97.6 billion euros. However, if one deducts the strategic holdings of foreign firms in Greek listed enterprises (such as that of Deutsche Bank in EFG Eurobank, of Credit Agricole in Commercial Bank, of Blue Circle in Heracles Cement, of Unilever in Elais and of Danone in Delta), then the purely stock market placements of foreign investors fall considerably, representing 17.2 percent of all stocks – or 16.8 billion euros – and 24.7 percent of the FTSE/ASE-20. A considerable part of the total value, approximately 2.6 billion euros, represents placements by foreign-based offshore companies, most of which are Greek interests. If this is deducted, the real participation of foreign investors in Greek stocks is estimated to represent 14.5 percent of the total capitalization of the Greek market and 22.6 percent of the FTSE/ASE-20. According to the latest data from FESE, ASE in December was one of only two European bourses with a negative performance (3.8 percent), the other being the Zurich bourse (1.48 percent). It was sixth in terms of a fall in trading volume in December compared to November (32.43 percent) and second after Zurich in terms of the fall compared to December 2000 (66.47 percent). The total value of trading on ASE in 2001 reached 43.2 billion euros, compared to 70.7 billion euros in Copenhagen, 203 billion euros in Helsinki, 608 billion euros in Madrid, 434 billion in Stockholm and 33.5 billion euros in Lisbon. Furthermore, ASE showed one of the slowest rates of circulation among European bourses, which indicates a strong liquidity problem. The turnover/capitalization ratio for 2001 was 0.39 percent, compared to 0.59 percent in Lisbon, 0.67 in Copenhagen, 1.76 percent in Madrid, 1.53 percent in Stockholm, 1.36 percent in the Euronext consortium, 1.17 in Milan and 1.12 percent in London.

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