ECONOMY

Foreign players steady on Greece

Positions held by foreign investors in Greek shares are steady, despite the sell off that has dragged equities some 60 percent lower in the last 12 months, said Athens Exchange chairman Spyros Capralos yesterday. Foreign investors trimmed positions in Greek stocks last month to 51.1 percent of total shares from 51.4 percent in August after increasing exposure in local equities for a number of years. Capralos said that in the first nine months of 2008 there has been an outflow of 2 billion euros from foreign players but described this as «modest» when compared to the 16-billion euro inflow between 2005 to 2007. «Despite the unfavorable climate, we are seeing that international investors as a whole are more or less maintaining their positions in our market,» Capralos said. Steep drops in banks have led the Athens bourse’s benchmark general index 59 percent lower in 12 months with weak global equity sentiment fuelling selling pressure. In a bid to stem the retreat, Greek market authorities have banned short selling until the end of the month, after having already tightened rules in line with other regulators clamping down on speculators. Sources indicate that the ban is likely to be extended until the end of November. Short-sellers try to profit from falling prices, borrowing stock in the hope of replacing it later at a lower price. Market experts are split as to how much more downside they see to stock prices, which have hit lows not seen since 2004. Capralos said signs are emerging that prices are becoming more attractive as 35 percent of large and mid cap companies are using cash reserves to buy back their own shares. «In addition, insiders are also active buyers. These are powerful signs that share prices are low,» he added.