Athens stocks plunge after exchange reopens

August 04 01:36 2015

The Athens Stock Exchange absorbed a beating after it reopened following a five-week shutdown on Monday, as analysts warned that shares could fall even more in the short term. Brokers said they spent the day trying to calm angry — or crying — investors after their portfolios shrank by a fifth or more in a single session, adding more pain on top of a gradual decline over the last several years.

“There is a great deal of tension and it seems like the worst is still yet to come,” said Takis Zamanis, chief trader at Beta Securities in Athens. He said shares of the Greek National Bank, which traded at $27.50 a few years ago, hit $0.09 on Monday. “It helps illustrate what a blow this is,” Zamanis said. “It’s heartbreaking.” The market plummeted 23% after it opened but climbed from there to end the day down 16.2%. The losses reduced the market’s capitalization by $8.8 billion.

In percentage terms, Monday’s drop was the second biggest ever, behind an 18.7% decline when the global economic crisis began in 2008. The carnage was widespread: 79 of 86 listed stocks lost value Monday. Banking stocks were hit the hardest, dropping 30% across the board before trading limits kicked in to halt selling of those securities. Zamanis said he expects bank share prices to fall further when markets reopen Tuesday.

Investors found few takers for stocks they tried to sell. “Last week I told my broker to sell certain positions when the market opened,” said Dimitrios Arvanitis, 77, a retired senior airline executive based in Thessoloniki, Greece’s second largest city. “But most shares I wanted to sell went unsold. The broker told me nobody was buying. “I’m about 25% poorer today than I was yesterday,” Arvanitis said. “I knew it would be bad, but it’s one thing to prepare yourself for that and another to see a lifetime of savings ticking away on the screen.”