ECONOMY

Hedge fund flight seems set to step up

Greek stocks suffered a nightmare of a week, as the flight by hedge funds continued at a rapid pace, taking the market to its lowest point since before the 2004 Olympic Games. The Athens Exchange (ATHEX) general index posted a 10.74 percent weekly decline, dropping to 2,117.41 last Friday from 2.372.09 points the week before. Local and foreign stockbrokers argue that the flight of capital will continue and intensify in the near future as no one knows the precise extent of hedge funds’ borrowing, which could be as high as three to four times their assets. The panic generated by the recession that is looming over the US economy calls for an exit from markets not only by average investors and market professionals but also by business sectors. A technical analysis of the Greek bourse shows that the drop of the last 11 months has been the worst in intensity and duration since 1985. The new week will bring the third-quarter results of listed companies, which are expected to show virtually no change from first-half figures.