Foreign institutionals ignore unprepared Athens stock market
The Greek capital market is, for the most part, terra incognita to European and North American institutional investors, if it figures on their map at all. Foreign institutionals are absent from the Greek market, and the biggest foreign positions in Greek shares are essentially languishing investments in portfolios that are active in developing markets. As for the big funds tracking mature markets, most of their managers not only do not track Greek shares but appear unaware of the Athens Stock Exchange’s (ASE) presence among the mature markets since May 31, 2001. US managers are the least informed about the Greek market and this is not a deficiency on their part, since their outlook is more global than that of their European counterparts. Even when the ASE was an emerging market, US managers of funds targeted at such markets were oriented mostly toward Pacific countries and Eastern Europe. Investing in the Greek market is even more daunting to the US retail investor. In 1999, when the ASE was galloping to record highs, a Greek-American businessman had approached a specialist in rating mutual funds and investment firms, asking for information on how he could invest on the Athens bourse. The answer was discouraging: There was neither an investment firm nor a mutual fund listed on the New York Stock Exchange that specialized in the Greek market. The rating firm expressed surprise at the finding, given that there are, among NYSE listings, about 100 closed-end funds specializing in country markets, not only the big ones but also small ones, such as Turkey’s, Israel’s, Pakistan’s and the Philippines’. The advice given to the Greek-American businessman was to contact the Greek Embassy in Washington DC. The lack of investment products targeting the Greek market reflects the lack of strategic planning by ASE authorities. All these closed-end funds were founded by private companies but also received generous aid from states, who were only too glad to have an investment vehicle on the world’s premier stock market. It is strange that the ASE has not taken advantage of the vibrant Greek-American business community to push for such a vehicle. Any sporadic efforts made ended up hurting Greece’s profile. European fund managers are more knowledgeable about the Greek market, but the prospect of investing there leaves them cold. Their focus, among European markets, is on the UK, France and Germany and, as a second option, on Spain, Italy, Sweden and Switzerland. The Netherlands, Belgium and Denmark are also considered interesting markets. Representatives of some of Greece’s biggest companies, such as OTE Telecom or the Public Power Corporation have often found themselves, during their European roadshows, in the embarrassing position of talking to small audiences, consisting mostly of low-ranking investment firm employees. Also, all reports on Greece by foreign investment firms are targeted exclusively at a Greek audience and often do not tell the truth. The memory of laudatory reports ahead of last year’s ASE «upgrade» is still fresh: The same investment firms proceeded with massive liquidations of their portfolios. Greece’s absence from the foreign institutionals’ plans is not the result of a conspiracy; it is the result of the incompetence of the market authorities and of government officials. Committees may hold interminable meetings, but the understaffed Capital Market Commission appears unable to monitor the market effectively. Thus, despite its strong points, the Greek capital market is shrinking due to a lack of preparation for the rigors of competition. The oil pipeline should be completed by May 15 and ready to commence operations in the first half of June. Hellenic Petroleum says it does not have a time schedule for the network of 30 oil stations it plans to set up in FYROM. This could indicate a change of strategy for the new management, or it could be related to the country’s forthcoming general elections.
