Greece’s financial markets will reopen on Monday, ending a five-week shutdown – the longest interruption to trading in the Athens Stock Exchange since the 1970s.
Greek traders will be able to buy stocks, bonds, derivatives and warrants, but only if they use new cash such as funds transferred from abroad, cash deposits, money earned from future sales of shares, or from existing investment account balances held by Greek brokerages,
The trading rules were announced by the Finance Ministry on Friday. Foreign investors will be excluded from all restrictions, provided that they were already active in trading before the imposition of capital controls last month.
Stock market trading in Greece was postponed as the Greek Government put in place safeguards to its financial system as it negotiated its third bailout agreement with European lenders.
“I think the market’s opening is another small positive sign that conditions are normalising in Europe,” said Jason Benowitz, a New York-based senior portfolio manager at Roosevelt Investment Group.
“In Europe overall, we’re starting to see signs of life and QE beginning to have an impact. Greece’s last- minute negotiations and referendum put a pause in the healing, and now it can resume.”
For the first three days of the exchange’s reopening, trading in a stock will be halted if it rises or falls by as much. 7 per cent in a 10 minute period. The previous limit applied to move of 10 per cent in five minutes.
Shares in the biggest Greek banks were suffered major losses before the market’s closure. Piraeus Bank shares lost 57 per cent of their value this year, while Alpha Bank is down 29 per cent. The benchmark Athens index has dropped 32 per cent over the last 12 months.
Source: Fairfax Media, CNN