Greece seems to be walking on egg shells on its way to recovery. After months of heady negotiations that saw the country on the verge of bankruptcy and a near “Grexit,” Athens is making its moves cautiously.
After a closure of three weeks, banks in Greece reopened on June 20 and the Athens Stock exchange is scheduled to be opened today albeit with certain restrictions for domestic investors. Costas Botopoulos, the head of the Hellenic Capital Market Commission, made the announcement on Friday and investors are feeling a small sense of relief that the country is stabilizing after months of uncertainty, negotiations that seemed to be going nowhere and signs of a near total financial breakdown for the country.
A Drop of 20% is Expected
Fears about Greece's worsening economy and the dire results of that happening are leading traders to predict that the exchange will plummet 20% or more upon opening.
Takis Zamanis, chief trader at Beta Securities, agreed with this assessment and said that "the possibility of seeing even a single share rise in tomorrow's session is almost zero. …"There is a lot of uncertainty about the government's ability to sign the... bailout on time and for possible snap elections.”
Bank shares, which account for about a fifth of the main Athens index, will be those hit hardest as a result of the restructuring and recapitalizing of the government’s financial system after the country’s near collapse and its still outstanding billion dollar debts. One report suggested Prime Minister Alexis Tsipras will be asking for about 10 billion euros (£7bn) this month for bank recapitalization.
