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Greek Stocks Sink to Two-Decade Low on Government Impasse
Greek stocks declined to their lowest level in two decades as the country’s political leaders met for a second day to try to form a government after an election that raised questions about the nation’s membership of the euro.
National Bank of Greece SA (ETE) led losses, tumbling 8.4 percent. Public Power Corp. SA plummeted 7.9 percent.
The ASE Index (ASE) dropped 3.6 percent to 620.54 at the close in Athens, its lowest level since November 1992. The benchmark measure has declined 8.8 percent this year for the second-worst performance of 24 developed markets tracked by Bloomberg.
“Depending on its duration, a period of political uncertainty is likely to have some negative near-term implications on a number of Greek companies,” Theodore Ritsos, an analyst at National Securities SA in Athens, wrote in a note to clients.
Alexis Tsipras, leader of the Syriza party who has vowed to rip up the terms of Greece’s international bailout, was handed the mandate to form a government today after Antonis Samaras of New Democracy failed to reach an agreement. Samaras gave up his bid after almost six hours of talks in Athens yesterday.
Tsipras said he wouldn’t agree to join forces with New Democracy and Pasok, the two Greek parties that have supported austerity measures in return for international funds. He called on the leaders of both parties to withdraw their pledges to impose the terms in writing by tomorrow when he is to meet with both of them to discuss forming a government.
A left-wing coalition government would nationalize banks to spur growth, repeal recent labor reforms and immediately cancel the bailout accords, he said.
“The Greek election result was a vote against a barbaric bailout,” he said in statements televised live in Athens on state NET TV. “There will be no 11 billion euros of additional austerity measures; 150,000 jobs will not be cut.”
National Bank of Greece, the country’s largest lender, tumbled 8.4 percent to 1.42 euros. Alpha Bank SA, Greece’s second-biggest lender plummeted 14 percent to 72 euro cents. Piraeus Bank SA (TPEIR) plunged 6.6 percent to 21.4 euro cents.
Public Power Corp., Greece’s largest electricity producer, which is 51 percent owned by the government, sank 7.9 percent to 1.97 euros.
State-run water utilities Athens Water Supply & Sewage Co. SA and Thessaloniki Water Supply & Sewage Co. fell 6.6 percent to 3.11 euros and 6.3 percent to 3.28 euros, respectively.
Greek construction company Ellaktor SA lost 7.2 percent to 97.4 euro cents.
Hellenic Telecommunications Organization SA (HTO) declined 1.9 percent to 2.08 euros, dropping for a third day.
Coca-Cola Hellenic Bottling Co. SA (EEEK) retreated 2.8 percent to 14.10 euros. The stock was cut to hold from accumulate by Marfin Analysis, meaning that investors should not buy more of the company’s shares.
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