Greek market cap at 84% of GDP
The Athens Stock Exchange (ATHEX) wants to promote and develop the common trading platform concept that is in place with the Cyprus Stock Exchange to include other regional exchanges as it intensifies efforts to increase its competitiveness.
â€œWe believe a lose tie-up between regional exchanges is in their best interest, since they will be able to maintain their independence, but at the same time have access to a bigger market, as the ATHEX and the CSE have already demonstrated by the launch and successful operation of the common trading platform (CTP),â€ said ATHEX Chairman Spyros Kapralos.
Speaking at a luncheon organized by the Cyprus-Greece Business Association and KEVE, Kapralos however, was quick to add that if the Bulgarian government proceeds with the privatization of a 44% stake in the Bulgarian Exchange, then the ATHEX is interested to bid for it.
â€œItâ€™s up to the Bulgarians to decide whether they wish to join us (ATHEX and Cyprus) or allow us to bid for a stake in the Exchange.â€
The Greek exchange, which slashed its fees by 33% since January 2007 has become one of the most profitable exchanges in Europe and plans to launch Exchange Traded Funds (ETFs) in the first half of 2007, allow short selling and the creation of a high-risk alternative market similar to the AIM and Alternext.
Kapralos advised his Cypriot audience to embrace foreign investments and forces of liberalization, as difficult as they may seem. The fact that foreign funds currently control 47% of the Greek market cap and transact 55% of daily turnover is seen by Kapralos as a mark of confidence.
â€œThe net receipts during 2005 from abroad into Greece exceeded EUR 5.2 bln and EUR 5.5 bln in 2006 (not including the Credit Argicole stake in Emporiki),â€ said the ATHEX Chairman.
He also referred to the sharp jump in traded volume on the CSE since the CTP came into operation, which although heavily influenced by the intense activity on banking titles, yet it has been instrumental in allowing CSE listed companied to have access to foreign capital.
In 2004, the average daily volume on the CSE amounted to EUR 300.000, which improved to EUR 1.6 mln in 2005 and EUR 8.8 mln in 2006. In the last two months of 2006 and January 2007, daily average traded volume on the CSE has exceeded EUR 20 mln.
Also worth considering is that 20% of all trades on the CSE are made by the 13 Greek remote members of the CSE, while the 9 Cypriot firms remote members of ATHEX transact 0.5% of all trades there.
â€œThe CTP alone will not solve all the problems. To attract capital, listed companies need to have solid management team, strong profitability and convince institutional investors that the money they wish to raise will remain in the company and be used to finance new expansion plans. Do that and you will succeed,â€ is the message of the Chairman of ATHEX.
Referring the ups and downs of the Greek stock market, Kapralos said that after the boom of 1999/2000 when the index reached the 6300 point, then followed a protracted decline, which saw the index dive to 1400 by March 2003.
â€œSince then the ATHEX has been on a steady upward course and yesterday for the first time since May 2000, the index crosses the 4800 level.â€
More importantly for Kapralos, despite the spectacular rally, the total market cap now at EUR 177 bln is 84% of Greeceâ€™s GDP, whereas in 1999, it had reached 170% of GDP when the total market cap was at EUR 197 bln.