The Greek stock market suffered heavy losses in 2018, with the general index losing 23.58 pct and the bank index plunging 49.82 pct in the year as the market failed to materialize great expectations prevailing early in 2018 while the country was preparing to exit the memoranda.
A clean exit from the memoranda era did not convince investors, who pushed the market to a new two-year low and bank shares to new historic low levels. Greek shares, based on the MSCI Greece index, recorded one of the worst performances globally, after Turkey, Panama, Botswana and Argentina, which plunged because of a sharp devaluation of their national currencies against the US dollar.
Bank shares’ drop was more intense compared with 2015 when the country was facing a Grexit, banks closed down for around a month and capital controls were imposed. Banks proved, once again, to be a weak link despite the fact that they successfully passed the stress test process in May, reduced their NPLs and minimized borrowing from the ELA mechanism.
The Folli Follie case played a crucial role in the market, as it undermined foreign investors’ confidence in the market, raising risk premiums. The stock market ignored the return of the Greek economy to positive growth rates and the achievement of fiscal goals. Analysts said they expected early general elections to be held between March and May and noted that 2019 was expected to be a very volatile year because of the elections.
The general index of the market ended 2018 at 613 points, down 23.56 pct in the year, with the market’s capitalization falling by 11 billion euros. Bank shares’ capitalization fell by 4.7 billion euros. The value of transactions fell for the fourth year in a row, with the average daily turnover at 55 million euros, from 59 million in 2017 and 85 million in 2015. The Large Cap index fell 23.75 pct and the Mid Cap index ended 19.04 pct down. The Oil index was the only one to move higher, while Commerce and Banks suffered heavily.
The Bank index fell 49.82 pct in 2018, Financial Services dropped 32.15 pct, Industrial Products fell 14.2 pct, Commmerce was down 97.74 pct, Personal/Home Products fell 14.93 pct, Food/Beverage was down 0.63 pct, Raw Materials fell 19.10 pct, Constructions declined 11.87 pct, Oil rose 6.28 pct, Travel fell 27.23 pct, Technology was down 22.48 pct, Telecoms fell 16.43 pct and Utilities fell 12.34 pct.
Among blue chip stocks, Terna Energy (26.98 pct) and Motor Oil (10.76 pct) scored gains in 2018, while Piraeus Bank (73.62 pct), National Bank (67.18 pct), Piraeus Port (45.16 pct), Sarantis (44.51 pct), Alpha Bank (41.97 pct), Eurobank (40 pct), PPC (34.67 pct) and Hellenic Exchanges (31.27 pct) suffered heavily.