ECONOMY

Greek market ripe for rebound

As the Athens bourse fell for the ninth straight session yesterday, a senior banker at EFG Eurobank said that the worst may be over for Greek stocks. Nikos Karamouzis, deputy CEO of Eurobank, the country’s second-largest bank, told reporters the Greek market had largely factored in negative developments and that further decline would be limited. With one or two pieces of positive news hitting the market, we will have a reversal of the negative sentiment and perhaps we will see a positive rebound in the general index of between 10 to 15 percent over a few sessions, he said. The Athens bourse lost 0.34 percent yesterday as index heavyweights banks continued their recent poor performance. Among the worst performers is National Bank, the country’s largest lender, whose stock has lost almost 13 percent in the last month. Brokers meanwhile point out that Greek equities have not retreated for so many consecutive sessions since February 2002. The difference is that back then, the market’s general index shed a total of 4 percent over nine days while now it has dropped 11 percent, according to one source. Concerns of a slowdown in the global and domestic economy weighing on corporate earnings have exerted selling pressure on Greek stocks, which are more volatile than their European peers. However, provisional data from Bank of Greece, the country’s central bank, indicate that credit expansion – a crucial factor in determining bank earnings – remains robust. Total loans issued in April exceeded the 3-billion-euro mark despite talk of rising interest rates and declining consumer purchasing power. Consumer loans grew by 815 million euros in April, versus 606 million in the same period last year. Karamouzis was, however, less upbeat about international markets, saying that the credit crisis has yet to fully unfold. «We still have some distance ahead of us in the crisis. We have yet to see the full cycle and the more global growth slows, banks will have an increasing problem internationally,» he said.