Risk premium seen as high

The successful placement of 10.7 percent of OTE telecom shares with foreign institutionals, EFG Eurobank’s announcement of a planned -1.2 billion share capital increase by September and the prevalence of negative sentiment on markets worldwide, due to unfavorable new data on consumer confidence, inflation fears and continuing jitters in the US housing market, marked trading on the Athens bourse for most of last week. The Athens Exchange (ATHEX) general index recouped most of the week’s initial losses on Thursday and Friday, closing just 0.13 percent lower than a week earlier, at 4,843.78 points, in full sync with other European markets. It was clear that most of the blue chips of the FTSE/ ATHEX 20 index and small-caps have run out of steam, which is largely attributed to the wave of planned share capital increases this summer. According to Constantinos Segredakis, head analyst at Praxis Securities, «the basic factors setting the trend on the domestic stock market are expectations of half-yearly results, macroeconomic developments and the climate to prevail on the main foreign markets.» «On a long-term basis, we remain positive, as long as the expectations of double-digit growth in corporate profitability in coming years are maintained, while any correction in the short term is desirable.» Vassilis Vlastarakis, head analyst at Beta Securities, warns that the risk premium in Greek stocks has increased substantially. Given the likelihood of a correction in the order of 15 percent on global markets, he recommends the strengthening of positions in defensive stocks, such as in the food, energy, consumer goods and telecoms sectors, and a trimming of positions in banks and real estate.

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