The Athens Stock Exchange has plunged 22.87% this morning as markets reopen for the first time in five weeks.
The Athex Large Cap Index, which is a subsection of the overall Athens Stock Exchange is currently trading 16% lower at 203.2 points which means that £2.1bn has been wiped off the value of the country’s biggest 25 companies.
Over the last five years, as the economic turmoil escalated, the Athex Large Cap Index lost more than 75% of its value.
The largest five companies listed in Greece are Coca-Cola Hellenic – the world’s second largest Coca-Cola bottler – Hellenic Telecom, National Bank of Greece, Opap – which runs the Greek national lottery – and Alpha Bank.
Bank recapitalisation is set to dominate talks between the Syriza government and Greece’s creditors this week as the next repayment deadline on 20 August draws closer.
The big four Greek banks bore the brunt of the selling pressure this morning. In the last 12 months the banks have lost more than half of their combined value, equivalent to over €17bn.
On Thursday, the IMF announced that it will refuse to participate in a new bailout until there is debt relief. IMF head Christine Lagarde on Wednesday said that debt restructuring was “becoming a commonly accepted view” and that “it’s inevitable that there is an element of debt restructuring”.
Greece’s ability to make a €3.2bn to the European Central Bank (ECB) later this month has been called into question due to the fact that it has used all bar €1bn of the €7.2bn bridging loan which was provided to it last month.
Of the €7.2bn extended to it, €4.2bn was used to repay the ECB whilst another €2bn was used to clear its arrears with the IMF.
Separately, data firm Markit released figures which showed that Greece’s manufacturing activity had collapsed in July.
The Manufacturing Purchasing Managers’ Index which measures the performance of the manufacturing sector and is derived from a survey of 350 industrial companies saw its reading fall from 46.9 in June to just 30.2 in July, anything below 50 represents a contraction.
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