Three-hundred foreign portfolios, led by the world’s big four according to the funds they handle (CSFB, Merrill Lynch, Morgan Stanley and UBS), are involved in the Greek stock market, which began to rebound in 2003 from the bursting of the market bubble in 1999. In all, the 300 portfolios manage funds equivalent to the gross national product of the 11 poorest nations in the world, or 40 times the total capitalization of the Greek market, which stands today at 141 billion euros. Athens bourse data up to April 20 show that the major investment portfolios have invested in about 25 listed firms with stakes of 5 percent and more. Leading in stakes are Fidelity, Morgan Stanley and Merrill Lynch, followed by Deutsche Bank, Credit Suisse First Boston (CSFB), UBS, Schroeder Investment and Cofidin. The entry of a major foreign investor in the share capital of a Greek listed company requires a stock that has satisfactory dispersion and marketability. Other factors include how active the company is, the management’s plan for future growth and the results of recent years as well as the people at the company’s helm. There are also some cases, as at investment companies, whereby foreigners are able to generate significant capital gains from derivatives contracts compared with the spot market. The net influx of funds from foreign investors into the Greek market since the start of 2006 has reached 2 billion euros, as more than 50 percent of the daily volume of transactions in the Athens Stock Exchange (ASE) today come from abroad. What is most impressive about foreign investment firms is that more than 50 countries in the world have commissioned one or more of them as consultants in their efforts to privatize utilities, manage public debt, issue bonds and other similar activities. Previous Greek governments, too, had commissioned CSFB as a consultant to the state in its many efforts to privatize Olympic Airways, while another firm, UBS Warburg, was for quite a while the consultant to state telecom OTE. Merrill Lynch and Morgan Stanley had also been involved. The secret of the power of major foreign firms lies in the fact that most of them are subsidiaries or investment branches of banks, so that they can cover the whole spectrum of a flotation or a company sale as they have access to the whole of the global economy. At the same time, major listed Greek companies are seeking partnerships with the world’s big four as the latter offer them integrated solutions at low costs compared with local institutional portfolios, not to mention that they are the ticket to the world’s major financial centers (London, New York, Frankfurt and Tokyo). Expectations Foreign institutionals expect that this year the government will proceed to serious structural changes regardless of the political cost, to privatizations, to substantial and immediate tax cuts for listed firms proven to invest, to less regulation in the already overregulated capital market, to serious incentives for mergers and acquisitions and to reductions of bureaucracy. The Athens market has been recently dominated by high capitalization, particularly so by banks. Foreign firms expect interest in banks to continue as well as the telecommunications sector. Finally the gap between blue chips and mid- and low-caps will slowly narrow.