Day of losses seen ahead for reopened Greek stock market

Greek traders said on Sunday they expected a torrid day of losses when the Athens stock market opens after being shuttered for five weeks as part of attempts to stop Greeceand’s financial collapse.
A combination of pent-up trading, worries about the future and Greeceand’s worsening economy could knock 20 percent or more off the Athens General Index on Monday, they said.
Trading of Greek assets in the United States over the period the bourse has been closed suggests the same.
andquotThe possibility of seeing even a single share rise in tomorrowand’s session is almost zero,andquot said Takis Zamanis, chief trader at Beta Securities.
The stock market is due to open on Monday morning for the first time since June 26, just before capital controls were imposed to stem a flight of euros.
This was the result of the failure of Greece and its European Union and International Monetary Fund creditors to agree a new cash-for-reforms deal.
Since then, a deal has been reached, but its implementation may prove hard and political in-fighting in Athens over the bailout rules could prompt a new election.
andquotThere is a lot of uncertainty about the governmentand’s ability to sign the … bailout on time and for possible snap elections,andquot Zamanis said.
Greeceand’s economy has also begun to reverse the gains it was making before Prime Minister Alexis Tsipras was elected on a strong anti-austerity platform.
The European Commission predicts Greece will fall back into recession in 2015, contracting 2 to 4 percent after having only just emerged from a six-year downturn.
h2h2 h2Banking Woesh2
Banking stocks may take much of the brunt on Monday because Greeceand’s financial sector needs to be recapitalized. A report in Sundayand’s Avgi newspaper, which is close to Tsiprasand’ government, suggested Athens is seeking around 10 billion euros ($11 billion) this month for bank recapitalization.
Banks constitute around 20 percent of the main Athens index. National Bank of Greeceand’s U.S-listed stock has lost around 20 percent while the Athens bourse has been closed.
andquotThe focus will be in the bank shares. They will suffer more because their investors have to face a dilution from the (expected) recapitalization of the sector,andquot said one asset manager at a Greek fund.
He added that Greek banks will not be profitable this year and are suffering from an increase in bad loans due to the crisis.
andquotIt would be realistic to expect a decline of about 15- 20 percent (at) the opening of the market on Monday,andquot the asset manager said.