ATHENS – After three days of hammering since reopening from a five-week closing, Greek bank stocks rebounded when profit takers moved in to take advantage of falling values.
The Athens Stock Exchange saw listed companies lose 63 percent of their market value, making some stocks ripe for the picking at cheap prices.
The market essentially crashed although officials wouldn’t say it and were buoyed when on Aug. 6 the banking index was 13 percent higher by mid-morning, led by a 22 percent jump in the National Bank, the country’s largest lender.
The banking index had earlier dropped 3.6 percent. Alpha Bank reversed a 26 percent early loss to trade 7 percent higher.
“The market seems to have found an equilibrium after its deep plunge. Buyers are having the upper hand despite the negative start, and this has helped sentiment across the board,” Takis Zamanis, chief trader at Beta Securities, told Reuters.
The broader market – of which banking stocks make up around 20 percent — was up 3.7 percent. Only one of the 25 stocks in the blue-chip index was trading lower, engineering contractor Metka.
Telecoms provider OTE was up 5.7 percent despite posting a second-quarter loss due to a voluntary redundancy scheme and a weak performance by its foreign operations.
Greece’s banks, still under capital controls after also being closed for three weeks, still need to be recapitalized after being brought to the edge of insolvency by political instability that brought fears the country would be forced out of the Eurozone before the government agreed to impose more austerity in return for another rescue package.
The European Union, one of Greece’s Quartet of creditors, said the banks need between 10-25 billion euros in an injection to stay afloat and stave off the government confiscating bank accounts of large depositors to make them pa for the government’s mistakes.