Greece will take another step away from full-on crisis mode on Monday by opening its stock market for the first time in five weeks, although immediate heavy losses are expected. 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 euro zone.
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 political and economic stability concerns. Market players in Greece and elsewhere are expecting stocks to fall sharply when the market opens at 0730 GMT (3:30 a.m. EDT).
Ilya Feygin, managing director at WallachBeth Capital, estimated late last week that losses could be in the region of 19 to 22 percent. Takis Zamanis, chief trader at Beta Securities, agreed and went further, suggesting no single share would gain on the day. Part of this is based on what has happened to Greek assets traded in the United States.