Minister sees an inverted bourse bubble

The sharp fall in equities this week represents an «inverted bubble» caused by profiteers, the government said yesterday as it announced plans to launch an investigation into unlawful acts that had driven the stock market down to a year-low on Thursday. Economy and Finance Minister Nikos Christodoulakis said he had ordered the relevant authorities «to look into every incident that had occurred outside of the law and to take action to protect investors.» Labeling the adverse developments at the stock market this week as «an inverted bubble,» he said the wave of selling was brought on by profiteers who were hoping for the market to deteriorate even further. The official concerns came after the Athens stock market tumbled to a year-low of 1,771.78 points on Thursday, preceded by three consecutive days of losses. Over the past week, the general share index has lost 4.81 percent of its value while since the beginning of the year, the decline has come to 31 percent. This week’s sell-off hit blue chips hard, with National Bank and Alpha Bank plummeting to year-lows while construction heavyweight Hellenic Technodomiki and metallurgical company Viohalco also found themselves swept along with the tide. Bourse authorities refuted suggestions that short selling and buying on margin, two relatively new investment tools in Greece, had contributed to this week’s sharp losses. Only a small amount of equities had been sold short in the last six months, they said. Christodoulakis said the market’s current level was an injustice to the robust Greek economy. Responding to the call for equanimity, investors yesterday lifted the benchmark share index by 1.17 percent to 1,792.45 points. Christodoulakis also confirmed that the 2003 budget would be tabled in Parliament on October 7. Earlier in the week, he had suggested the document could be held back by municipal elections on October 13. Next year’s growth is projected at 4.1 percent on the back of heavy public investment spending and the inflow of community funds. Growth, however, is expected to slow to 3.1 percent in the event of a war in Iraq, an estimate still significantly higher than the major eurozone economies. The International Monetary Fund earlier this week released a 3.2-percent growth forecast for Greece next year.