The composite index of the Athens Stock Exchange fell dramatically Monday after it opened for the first time in five weeks. Photo courtesy of wikimedia.org/ GianniM.
ATHENS, Greece, Aug. 3 (UPI) -- Athex, the Athens Stock Exchange, opened for the first time in five weeks Monday, and promptly fell 23 percent, with Greek banks leading the plunge.
The exchange recovered, but was still down 18 percent in mid-day trading. About one-fifth of the stocks listed on the Greek exchange are banking companies, and Piraeus Bank SA and National Bank of Greece SA led the fall, to 30 percent, the daily maximum allowable decline. Controls on capital still limit bank customers to withdrawals of 60 Euros per day, making stock purchases difficult for Greek residents unless they have cash on hand or money sent from outside the country.
Soon after the Athens exchange opened Monday morning, the Athex composite was 615.16, or 182.36 points below the closing figure of June 26, the last day the exchange was open.
The selloff was expected, and reflects the country's financial crisis. The government closed banks and impose financial controls before accepting a deal from European lenders in July to avoid defaulting on massive government debt. Data released Monday indicated Greece's manufacturing activity, which is about 10 percent of the country's gross domestic product, fell to its lowest level in years, the bank shutdown prompting supply and purchasing problems. The purchasing managers' index of the financial information company Markit Ltd. fell to 30.2; a figure of 50 is indicative of growth.
"It's a total disaster, it's like hell here," Stavros Kallinos of Guardian Trust told Bloomberg News from the Athens exchange. "You can't have a market working properly with capital controls. It will be a gradual process. We're moving forward, but a step at a time."
Constantine Botopoulos, chief of the Greek government's capital markets commission, was more optimistic, telling Athens' Skai Radio, "Naturally, pressure is expected, markets will not fail to comment on such an extensive shutdown. But we must not get carried away. We must wait until the end of the week to see how the reopening will begin to be dealt with more coolly."
