Greek stock exchange savaged on re-opening

London

THE Athens Stock Exchange reopened after five weeks and predictably slumped, by a whopping 22 per cent from its June close. Illustrating the debt crisis which has crippled the economy, the Athens Stock Exchange General Index at 623 points (slightly higher than the worst level of 615 points) has collapsed by 90.2 per cent from its 2007 economic boom and bubble peak of 6,355 points in 2007.

The market opened while capital controls and restricted withdrawals from banks remained. Shares of banks, which urgently require a capital infusion, if or when the 86 billion euro (S$130 billion) bailout package is finally agreed in coming weeks, were unsurprisingly the worst performers.

Piraeus Bank and National Bank of Greece, for example, plunged by 30 per cent, the daily maximum allowed by the stock exchange. Economists estimate that normalisation of the Greek banking system can only occur if Greece's creditors and the Greek government recapitalise the banks by pumping 10-25 billion euros into their sh…