Greek investors retrench, foreigners increase stakes

The prolonged downturn in the Athens stock market seemed to be taking a heavy toll on both listed companies and local investors while a surfeit of attractive valuations appeared to be drawing foreign investors, data released by the Athens Stock Exchange (ASE) yesterday indicated. Since the bubble burst three years ago, the market has appeared to be in free fall. The market’s capitalization at the end of September amounted to just 69 billion euros, marking a loss of some 30 percent in the first nine months of the year, ASE’s statistics showed. At the height of the stock bubble in 1999, the benchmark share index rose to a dizzying 6,355 points. Yesterday, the general share index closed at 1,805.97 points, a fall of 72 percent from its pinnacle three years ago and down 30 percent since the beginning of the year. The bourse’s prolonged slump has as much to do with poor corporate results and global uncertainties as with poor investor sentiments. Referring to the wave of sell-offs, Economy and Finance Minister Nikos Christodoulakis earlier this month likened the situation to an inverted bubble created by unscrupulous profiteers, hardly reflecting Greece’s solid economic fundamentals. Athens’s decline has mirrored a similar slide at other European stock markets, said Maria Giazitzoglou, analyst at P&A Voilis. While Athens posted a 29 percent drop in the first half of the year, European and US markets fell by 34 percent and 35 percent respectively. She said the slump at the ASE has dragged on much longer. «Athens’s fall started in 1999 while the slump in other European markets began a year later,» she said. Greek investors accounted for 72.34 percent of the market’s capitalization up to the end of September, marginally down from 75.4 percent just a year ago, the ASE said. Retail investors were the hardest hit by the market’s extended doldrums, with their participation falling to 29.65 percent from 31.28 percent a year ago. Greek institutional investors also appeared to be curtailing their presence, with their participation declining to 15.4 percent from 17.2 percent a year earlier. Drawn by Athens’s attractive valuations, foreign investors have been gradually expanding their presence since the beginning of the year, ASE figures showed. Foreign investors accounted for 27.66 percent of the market’s value at the end of September, up from 23.86 percent in January and 24.5 percent a year earlier. «Foreign institutional investors have been able to pick quality stocks at ridiculously low prices,» said one analyst who declined to be named. Confirming foreign investors’ interest in Greek blue chips, ASE’s statistics showed that foreigners’ stakes in companies listed on the FTSE/ASE-20 index amounted to two-fifths of their total capitalization. The list includes telecoms heavyweight OTE, National Bank, Alpha Bank, telecommunications equipment maker Intracom, cement firm Titan and construction company Hellenic Technodomiki, the majority of which have seen their stocks pulled down by negative investor sentiment. The foreign holdings in the FTSE/ASE index amounted to 39.5 percent at the end of September, up from 30 percent a year previously. Greek investors, in contrast, pared their participation to 61 percent from 69.6 percent. The ASE’s figures showed that blue chips have not been left unscathed by the mass sell-offs. The 20 companies on the FTSE/ASE-20 saw their total capitalization plunge to 35.7 billion euros at the end of September from 45.95 billion euros a year earlier. Since the beginning of the year, the blue chip index has lost a third of its value. Analysts said the trends noted in ASE’s latest statistics are set to continue in view of the continuing global uncertainties.