A boom in the dust?

Signs are emerging that the Athens Stock Exchange is emerging from its long decline following the mad days of the 1999 boom. The stirrings are the result of some positive expectations tied mainly with the international feeling that the uncertainty that preceded the Iraq war is over, with the American and European stock exchanges showing an upward trend. In the last two months, the benchmark general index of the Athens bourse gained about 500 points and is approaching the 2,000-point mark, driven mostly by the rise in state-owned stocks, public companies, banks and their subsidiaries. There is also evidence that dormant accounts have begun trading again and there is a significant rise in the daily turnover on the exchange. Aside from the justifiable awakening of the domestic stock market, though, there is also a strong feeling that some of the problems evident in 1999 might reappear as well. In the last couple of weeks, similar «games» have begun to be played, based on rumors and unsubstantiated information that could create another bubble. This might not reach the size of the previous one, when the ASE peaked at 6,355.04 points on September 17, 1999, but it could be a bubble just the same. This fear is fueled by the fact that even after the bitter lessons of the past four years, investors are returning to the Athens bourse as if they had forgotten their losses and the reasons for their abstention. The general index closed at 1,910.60 points yesterday, regaining the level of September 2002. This is a gain of 30.21 percent from its lowest point, which it reached on March 31 this year, when it closed at 1,467.30 points. Despite the rise of the general index over the last couple of months, and the gains of some companies which are even higher, these figures are a drop in the ocean compared to the fortunes lost in the boom and bust. An example of this is presented by the stock of Klonatex, which rose a whopping 237.78 percent to 4.56 euros in just a few trading sessions. If one looks back at 1999 though, one finds that Klonatex stock was trading at the equivalent of 100 euros a share. If anyone still holding onto his shares from then wants to claim a profit, he will have to await a rise of 2,093 percent in the stock’s value. Blue chip National Bank of Greece rose 80 percent recently, its share value reaching 15 euros. But in 1999 it was worth 50 euros.

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