Old habits die hard for weak Greek stocks

Despite Greece’s high growth rate, intrinsic weaknesses in the economy which are now gradually waning make foreign investors hesitant toward investing in the Greek stock market, a senior banker said yesterday. «With three important factors presenting a rather negative picture for the Greek bourse, many foreign analysts believe that Greek firms must be traded at some discount,» said the managing director of EFG Eurobank Ergasias, Nikos Nanopoulos, at the inauguration of the bank’s new stockbrokerage headquarters. The three factors are the quality of corporate governance, the accuracy of financial statements combined with the low degree of adoption of international accounting standards, and low liquidity and trading volumes. Nikos Karamouzis, chairman of EFG Eurobank Stockbrokers, emphasized that the maintenance of a positive picture for the stock market depends on the improved profitability of firms, an effective structural economic policy and a good international climate. «The local market is small and the country’s geographical position, red tape and high costs do not help. There are specific sectors which could attract big foreign capital, such as energy, telecoms, tourism and services, if privatizations progress. However, these are sectors in which the State still has a strong presence,» he said. Karamouzis welcomed the recent Georgakopoulos committee report on tax reform, saying it was radical and comprehensive in some aspects. He praised the government for its progress in the implementing the program since last year’s devastating financial crisis that halved the value of the lira and led to the worst recession since 1945. But he said it was important to continue strict implementation of reforms.