Springtime for ASE?

The Athens Stock Exchange, long in the doldrums, appeared to join in the general enthusiasm of international markets yesterday as they were lifted by good news in the telecommunications sector. The tripling of Cisco Systems’ profits in the previous quarter led to a 21-percent rise in its shares and prompted buyers’ interest in similar companies in Europe. This led to a rise of 1.74 percent in London, 2.5 percent in Paris, 2.1 percent in Milan, 3.21 percent in Frankfurt, 2.6 percent on Wall Street and 2.53 percent in Athens. The Sophocleous Street bourse appeared to be lifted by reports claiming that the banking sector will move again toward consolidation and cooperation. Strong rumors were back regarding possible moves by National, Alpha, Eurobank, Commercial and the Agricultural Bank. This was despite the fact that the banks’ management did not allow for any such action at the moment. However, observers are keeping an eye on the sudden change of three deputy governors of the Agricultural Bank last Thursday which were tied to their opposition to the search for a strategic partner for the troubled bank. In any case, the climate of revival on international stock markets is tied directly to the improved development potential of the US economy and the related expectations that are being cultivated in the eurozone economies. But the Greek government is also placing its hopes in social security funds investing in the Athens bourse. Next week the general secretary of the Finance Ministry, Giorgos Zanias, will meet with the presidents of all the funds to brief them on the possibilities for them to invest reserves in accordance with new legislation. The total reserves of the funds are estimated at 17 billion euros (6 trillion drachmas) of which 2.3 billion (800 billion drachmas) can be invested on the stock exchange. A large amount of the reserves, some 8 billion euros, is managed today by the Bank of Greece in the form of state bonds. The legislation which was passed recently will change the Supervisory Committee from a body that first had to approve of every investment in the stock market into one which will examine only the legality of investments and the extent to which they are in line with investment principles. Another step aimed at streamlining the system allows funds to hire investment consultants.