Trading in Greek stocks will resume next week, ending a
five-week closure of the country's main stock exchange, but
strategists say it could take months before investor confidence in
Greek assets is restored.
The Athex stock exchange said on Friday it will reopen for
business on Monday August 3. The exchange halted trading in late
June, after Greek Prime Minister Alexis Tsipras said the country
would hold a referendum on whether to accept terms its
international creditors were offering in return for fresh financial
aid.
Greek voters ultimately rejected those terms, raising fresh
doubts about the country's future in the eurozone. Though the
government eventually compromised with creditors, accepting some
tough conditions.
Still, it will likely take months before the country and its
companies can raise cash on international markets again, analysts
and investors say. "The political uncertainty is such that it will
take a while until investor confidence in Greek assets is fully
restored," said Gary Jenkins, chief credit strategist at
London-based asset manager LNG Capital.
"The Greek crisis has had an adverse impact on all sectors of
the economy," said Apostolos Gkoutzinis, head of European Capital
Markets at law firm Shearman & Sterling in London.
Mr. Gkoutzinis added that for investor confidence in the Greek
market to be rekindled, the risk of Greece exiting the eurozone,
and the risk of Greece defaulting on its financial liabilities
would need to be off the table "once and for all." He said that the
banking system would also have to become completely stable
again.
The benchmark Athex Composite index lost more than 30% of its
value over the past year as Greece's debt crisis intensified.
Greek government bonds prices have also slumped, pushing two
year yields above 50% in early July. Yields have since fallen back
to around 20%, although trading in Greek debt has slowed to a
trickle during the stock market shutdown. Yields rise as prices
fall.
The Luxembourg stock exchange in late June suspended trading of
some Greek corporate and government bonds but lifted that
suspension on Friday last week, citing "recent developments
concerning the situation in Greece."
Trading had been suspended in bonds issued by lenders Alpha Bank
AE, Eurobank Ergasias SA, the National Bank of Greece SA and
Piraeus Bank SA, as well as in bonds issued by the Hellenic
Republic and Hellenic Railways.
Meanwhile, Mr. Tsipras on Friday acknowledged making contingency
plans in case Greece was forced from the euro, but said it was
never his aim to leave the common currency.
The decision to call a referendum also prompted a temporary
shutdown of the banking system and the imposition of capital
controls to prevent money from flooding out of the country. Greek
banks reopened their doors on July 20, a week after Athens struck a
deal with creditors to negotiate a new bailout, but strict limits
on withdrawals remain in place.
Write to Josie Cox at josie.cox@wsj.com
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