ECONOMY

ASE back at 2000 levels

For the second time in 2006, the Athens Stock Exchange compound share index has risen above 4,300 points. The market’s capitalization has topped 155 billion euros. There is, however, a big difference in the quality of the market in 2000, the last time the index reached the current level, and now – besides the obvious fact that back then it was on the way down from the 1999 bubble. Comparing data from 2000 and 2006 shows that blue chips have a much larger share now. According to investment firm Proton Securities, the five biggest companies accounted for 28 percent of total market capitalization in September 2000, while in May 2006, they accounted for 37 percent. Four companies (National Bank, telecoms firm OTE, Alpha Bank and EFG Eurobank) were among the top five both in 2000 and now, while betting firm OPAP, currently ranked third by capitalization, was not even listed. In its place was mobile telecommunications firm Vodafone (then Panafon) which has since been delisted and absorbed by its UK-based parent company. Resistant to fall The stock market went through a period of protracted fall from its peak close of 6,355.04 points on September 17, 1999, to its trough of 1,464 points on March 31, 2003. Despite the fact that the market is still 2,000 points away from that peak, some companies are now worth more than in 1999. Among blue chips, this is true of National Bank and bottler Coca-Cola HBC, which has doubled its value since 2000. Among mid-caps, Frigoglass, Jumbo and Hellenic Exchanges are the most prominent examples. There are other companies which resisted the big fall, but these changed their activities completely. In other words, they served as «shells» for other companies to get into the market by circumventing the IPO process. For these, no comparison is possible. The decline mostly hurt small-capitalization firms whose value had been inflated, sometimes up to 90 times, during the market boom. Many of the old stars have entirely disappeared from the listings, while others are in suspension. Most of the survivors now have a capitalization below 150 million. They still account for 60 percent of all listings. They are a sign that investors now prefer companies of proven value.