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EU-funded firm beats the odds as market rout hits Athens


Yanis Varoufakis

Yanis Varoufakis

Yanis Varoufakis

Greece's reopened stock market closed with heavy losses yesterday following a five-week shutdown brought on by fears the country was about to be dumped from the Eurozone.

Bank shares fell 30pc, and the fall would have been greater if loss-limits had not kicked in to stop investors selling any more.

The main Athens stock index ended down 16.2pc, recovering slightly after plunging nearly 23pc at the open. It was the worst daily performance since at least 1985 when modern records began, including a 15pc fall when Wall Street crashed in 1987.

Ironically, while Greece's stand-off with creditors was behind the five week shut down, a contract from the European Commission helped furniture maker Dromeas buck the slump.

Shares in Dromeas soared almost 29pc after clinching a €30m deal to supply European Commission offices.

Dromeas closed at €0.147 a share, a 28.9pc increase from its previous close of €0.114 each.

The company announced on July 29 - during the five weeks the stock market was closed - that it had won an international tender to supply all EU offices over a five-year period. It won a similar tender in 2009.

Away from Athens, the broad European FTSEurofirst 300 index was in positive territory for the day. "The market tanked, as expected," said Takis Zamanis, chief trader at Athens-based Beta Securities.

Banking shares, which make up about 20pc of the Greece index, were hard hit. The overall banking index was down to its 30pc daily limit.

All five shares comprising the index - National Bank of Greece, Alpha Bank, Piraeus Bank, Attica Bank and Eurobank - were locked down for much of the session at the limit with no buyers.

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Greece's banks have seen deposits severely depleted as Greeks pulled out their euros for fear they would be forcibly converted into a new drachma outside the Eurozone. The banks have been propped up by emergency money from the European Central Bank (ECB).

Traders said they expected more bank-share losses in the next session. "Bank shares look like they have more room to slide before bids emerge," said one fund manager, who declined to be named.

"It will take a few days for the market to balance out."

Some companies outperformed, mainly those with exposure abroad, although they still fell. "Buyers emerged for non-bank stocks, blue chips like OTE Telecom and (gaming group) OPAP, which shows that there is buying interest out there," Mr Zamanis said.

OTE, which accounted for around 30pc of the day's turnover, lost 11.5pc.

There were only nine gainers, mainly small caps and with very small volume, exaggerating the moves. Trading on the Athens bourse was suspended in late June as part of capital controls imposed to stem a debilitating outflow of euros that threatened to collapse Greece's banks and hurl the indebted country out of the Eurozone.

Since then, Athens has agreed a framework bailout plan with its European Union partners in exchange for stringent reforms and budget austerity.

But implementation of the deal is some way off, keeping alive the threat of political and economic instability. There is also concern that Prime Minister Alexis Tsipras - who has already lost Finance Minister Yanis Varoufakis - may need to call an election.

A report in the newspaper 'Avgi', which is close to Syriza, said the government was seeking €24bn in a first tranche of bailout aid from international lenders in August.

Of this, the newspaper said, €10bn was earmarked for an initial recapitalisation of Greek banks, €7.16bn to repay an emergency bridge loan and €3.2bn to repay Greek bonds held by the ECB and others. (Reuters)

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