Greek authorities working towards reopening of ASE

Gazzetta team 22 Ιουλίου 2015 - 15:11

The Bank of Greece and the Capital Market Commission are currently drafting a legislative act of the preconditions and terms for the reopening of the Athens Stock Exchange. These proposals will be submitted to the Finance ministry for a ministerial decision to be signed later on.

When the market will reopen and under which terms are entirely a political decision, while pending issues for the restart of the market are still numerous. The crucial question is the limit for Greek investors to use from their bank deposits for market transactions. According to sources, the market reopening will find Greek investors under significant limitations, as the Bank of Greece fears that there will be a danger of transferring significant amount of money from bank deposits to the stock market.

Market sources told ANA-MPA that any decision loosening the restrictions on Greek investors' cash reserves will not have a big impact on bank deposits since investors will be very cautious in putting fresh money in the stock market because of the high investment risk in the Greek market.

Average daily turnover was around 100 million euros before the market was closed, of which 30 million were from Greek investors. Based on these figures, traders expect that the outflow of deposits in a period of one month will not exceed 300 million euros.

Market authorities seemed to have accepted a request by securities firms for a free use of credit reserves of their clients, estimated at around 30 million euros, while a solution is sought on the free use of cash reserves in bank accounts for share transactions.

Greek investors will be allowed to use fresh money to buy shares, while foreign investors will have absolute freedom of moves.

Stock market authorities wish for an immediate reopening of the market fearing that the market's international picture will be hurt if Greek shares were to be downgraded or delisted from international indices such as MSCI and FTSE. They said that there was a fear that the Athens Stock Exchange could be driven to isolation, leading to a massive exit of international institutional investors which accounted for 58.4 pct of market capitalization in June, controlling more than 60 pct of daily value of transactions in the market.

The last trading session of the market was on Friday, 26 June. Since then capital worth 49 billion euros were frozen in the market.