Athens – Greece’s battered banking stocks rebounded on Thursday after a three-day rout that wiped 63 per cent from their market value.
The banking index indicated that investors hurriedly picked up cheap shares after what was essentially a crash, helping the broader Athens market to recover.
According to the Athens bourse’s banking index, FTATBNK reversed early losses and was 13 per cent higher with all of its constituent stocks in positive territory.
They were led by a nearly 22 per cent jump in National Bank (NBGr.AT), Greece’s largest lender.
The banking index had earlier dropped 3.6 per cent.
Alpha Bank (ACBr.AT) reversed a 26 per cent early loss to trade 7 per cent 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,” said Takis Zamanis, chief trader at Beta Securities.
The broader market — of which banking stocks make up around 20 per cent — was up 3.7 percent.
Only one of the 25 stocks in the blue-chip index was trading lower.[pro_ad_display_adzone id=”70560″]
Telecoms provider OTE (OTEr.AT) was up 5.7 per cent despite posting a second-quarter loss due to a voluntary redundancy scheme and a weak performance by its foreign operations.
Greece’s banks need to be recapitalised after a flight of euros from deposits for most of this year and mounting bad loans.
But that will hurt existing shareholders, when it comes, by diluting the value of their holdings.
Athens and its international lenders share the view that banks must complete their recapitalization by the end of this year and avoid a haircut on large depositors, Greece’s finance minister said.
The European Union estimates the recapitalization may cost between 10 billion euros and 25 billion euros.
“The key determinant for bank values remains the outcome of the coming comprehensive assessment by regulators,” said analyst
Nick Koskoletos at Athens-based Eurobank Equities.
“Trading is expected to remain highly volatile in the interim.” (Reuters/NAN)