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If Greek trades in U.S. are any guide, Athens bourse may have rocky re-start

Published 31/07/2015, 15:02
© Reuters. A Greek flag flutters outside the Athens stock exchange
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By Sudip Kar-Gupta

LONDON (Reuters) - U.S.-listed equity instruments tied to Greece have fallen around 20 percent since the Athens stock market was closed in late June, heralding a potentially rough start when it finally re-opens.

Greece aims to re-open its stock market (ATG) on Monday after a five-week shutdown due to the country's debt and economic problems. The bourse is still awaiting a finance ministry decree detailing new trading rules.

While traders cautioned that it was hard to predict what the opening prices might be when the volatile Greek exchange resumes business, they said shares would most likely be under pressure.

"It will certainly be a market under severe pressure when it re-opens, and the banks could bear the brunt of it," said Toscafund analyst Takis Christodoulopoulos.

This was based on the performance of the "GREK" exchange traded fund (ETF) (K:GREK) - comprised of U.S. market listings of Greek companies - since the actual Athens stock exchange has been shut.

The "GREK" edged up 1.6 percent on Friday but remains down by around 20 percent over the last month.

National Bank of Greece's (AT:NBGr) U.S-listed equity instruments (N:NBG) also rose 1.7 percent on Friday but again are down some 20 percent in the last month.

"My estimate is that if it were to open right now, the Athens index would open between 625 and 645 points, a decline of between 19 and 22 percent from its last closing level on June 26," said Ilya Feygin, managing director at WallachBeth Capital.

The Athens Stock Exchange (AT:EXCr) was shut when the government closed banks and imposed strict limits on withdrawals and foreign transfers to prevent a run on deposits by savers and companies.

The benchmark ATG equity index is down by around 4 percent since the start of 2015, underperforming other European stock markets such as Germany's DAX (GDAXI), which is up around 15 percent so far in the same period.

The ATG fell at the start of June but then rose towards the end of that month, on signs Greece could get a new bailout deal.

© Reuters. A Greek flag flutters outside the Athens stock exchange

Any sharp swing higher or lower on the Athens market when it re-opens could also lead to shares being temporarily suspended.

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