ECONOMY

ATHEX chief is confident stock market will avoid risk of downgrade by FTSE

The president of the Athens Exchange (ATHEX), Spyros Kapralos, has moved to put an end to a debate regarding the downgrading of ATHEX by index company FTSE. «We do not face the risk of being downgraded,» he said emphatically. The Greek stock market is to be re-evaluated by the international firm in April, and it will be up to FTSE to assess whether it will remain in the mature stock market category. FTSE Group, the global index company which classifies all stock exchanges, announced on September 20, 2007, that Greece remained on its watch list and was facing the likelihood of being downgraded as part of its annual review. It said the Greek stock market has still to meet another five criteria, including banning short selling and stock borrowing, while special reference is made to the rather flat image of the derivatives market. Nevertheless, any possible downgrade will be announced this year but will be effective as of 2009. FTSE also announced it will cooperate with the Athens Exchange (ATHEX) and regulatory authorities in an effort to handle the situation and find ways out of the present impasse. Interestingly, countries that have been entered on the watch list remain there for at least 12 months before status changes can be made. New measures Kapralos and his team are currently making laborious efforts to smooth things out. New measures are to include allowing international remote members to operate as of this month as well as efforts to boost the volume of derivatives market transactions. Some advanced solutions may also be employed to facilitate further market development, such as cooperation with some major foreign derivatives exchanges. Kapralos is confident that FTSE will eventually retain the ATHEX’s status as a developed market, stressing that EU Directive MiFiD, when implemented, will effectively help in wiping out the reasons that led to its being entered on the watch list. «Continued interest by foreign investors confirms that on-going modernization efforts by the Greek capital market are in the right direction,» says Kapralos. He expressed certainty that the ATHEX will manage to avoid downgrading. The watch list has been created in order to ensure that the potential reclassification of countries is transparent to investors. It contains countries that may be subject to a change in their classification if a number of set conditions are met. The watch list is reviewed annually by the FTSE Equity Indices Committee.