Greece’s stock exchange expects to benefit from a 50 billion-euro ($70 billion) pipeline of state- asset sales and is preparing to take a leading regional role as the industry’s largest companies merge.
Greek Prime Minister George Papandreou has pledged to sell government assets to pay down a debt burden that has swelled to the biggest in Europe as a proportion of gross domestic product. Greece’s credit rating was cut two steps by Standard & Poor’s to BB- on March 29, three levels below investment grade.
“The number one issue now is to be an effective organized market so we can contribute to the state-asset sales and mergers about which we hear so much,” Athens Exchange Chairman Socrates Lazaridis said in an interview in Athens on March 28. That “will help lead to a recovery in the Greek economy.”
Lazaridis dismissed concerns that the government is moving too slowly on asset sales, which could lift volumes on the bourse much as fundraising by banks did last year as the debt crisis depleted deposits and capital.
“When you rush in, you trip,” he said.
Greece’s ASE Index has risen 10 percent in 2011, the most of the 18 western European markets. Thessaloniki Port Authority SA and Piraeus Port Authority (PPA) SA, the nation’s largest state- controlled ports, led gains. The fates of those stakes are currently being examined, along with that of the government’s other holdings in both listed and closely held companies.
The ASE is climbing back from a 36 percent slump last year that was caused by speculation the country would be forced to default. National Bank of Greece SA (ETE), which makes up 12 percent of the index’s weighting, tumbled 61 percent in 2010.
More than $20 billion of exchange acquisitions have been announced in the past five months as venues in North America, Europe and Asia try to cut costs and offset declining profits from equity trading with options, futures and derivatives. The deals include Frankfurt-based Deutsche Boerse AG (DB1) agreeing in February to buy New York-based NYSE Euronext (NYX) for about $9.5 billion, creating the world’s largest exchange operator.
Lazaridis, who’s also chief executive officer of Hellenic Exchanges SA, operator of the Athens stock and derivatives exchanges, said the recent merger activity pointed to the need to provide a more extensive regional service for clients.
The eastern Mediterranean “could be a point at which there is one of these geographical hubs,” he said. Hellenic Exchanges, known as Helex, introduced its XNET service to simplify cross-border trading earlier this month.
Lazaridis said he’s open to teaming with rivals and that he’s aiming for the Greek exchange to be in a stronger position in 2 1/2 years, after which time he predicts the field will be clearer for smaller bourses like his own.
“Whatever brings value to shareholders and stakeholders makes sense in a changing environment such as the one markets find themselves in now,” he said. “That response doesn’t mean that there is something being discussed.”
Non-resident investors held 51 percent of the market value of all stocks listed on the Athens Stock Exchange in February, up from 49 in the same month a year earlier. The most frequent questions from investors regard a firm tax regime, state asset- sale plans and Greeks’ ability to adapt to the austerity measures taken to cut the budget deficit, Lazaridis said.
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