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Greek stock exchange reopens after 5-week shutdown

By AFP | August 3rd 2015

Greece's stock exchange reopened Monday with a drop of more than 22 percent after a five-week shutdown imposed by the country's debt crisis and capital controls.

The ATHEX plunged to 615.72 points a few minutes after opening at 0730 GMT, down 22.82 percent from its June 26 close.

The country's main banks took a heavy blow at the opening with drops of around 30 percent.

"Naturally, pressure is expected, markets will not fail to comment on such an extensive shutdown," Constantine Botopoulos, head of the capital markets commission, told Skai radio.

"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."

The stock exchange operates as normal for foreign investors but local traders face limits on their transactions as part of the capital controls imposed by the government last month.

The restrictions mean that Greek investors are unable to finance the purchase of securities by taking money from their bank accounts in Greece. They will, however, be able to use foreign bank accounts or make cash transactions.

The volatility cap has been reduced from 30 percent to 20 percent during the first three days of trading.

The country's lenders are in a vulnerable position because of outflows of billions of euros from deposits over the past six months.

Some 40 billion euros ($44 billion) has been withdrawn from Greek banks since December, according to the country's banks association, amid fears over the fate of the Greek economy.

The reopening of the stock market comes after senior EU and IMF auditors held their first meetings with Greek ministers to finalise a new three-year bailout for the country which could be worth up to 86 billion euros ($94 billion).

The last trading session on the Athens stock exchange was on June 26, ending a few hours before Prime Minister Alexis Tsipras announced a referendum on the stringent bailout conditions demanded by Greece's international creditors.

In response, worried Greeks rushed to withdraw cash from ATMs, prompting the government to impose capital controls from June 29 and announce the closure of the country's banks and the stock exchange.

The banks reopened on July 20, but withdrawals and money transfers abroad remain restricted.

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