“Speculative moves” are behind the pressure on the Athens Stock Exchange and the Greek banks, the government said late on Wednesday.
Prime Minister Alexis Tsipras hosted an extraordinary meeting with top government officials around economy and financial issues after the dramatic session in the Athens Stock Exchange on what media call “Black Wednesday.”
In a statement issued after the meeting, the Prime Minister’s office said among others that “the selling pressure on the bank stocks does not reflect the fundamentals of banks.”
Stressing that “the banks successfully passed the stress tests in May,” the statement added that the banks
- have published high rates of capital sufficiency,
- have exceeded targets for lowering bad loans in first half of 2018
- have increased their deposits on monthly basis
- have significantly lowered their reliance on emergency ELA funding; two systemic banks have brought their reliance to zero, two others will do so by the end of the year.
Similar are the developments with the fundamental volumes of the Greek economy and the improvement of the macroeconomic environment.
“The economy is also improving and this is reflected in positive growth rates, decreasing unemployment and permanent improving of confidence index,” the statement said.
“Therefore the government evaluates the pressure as due to speculative moves and it closely monitors the developments,” the statement stressed.
Greek banks shares tumbled heavily on Wednesday with Piraeus Bank to be the main target of an aggressive sell-off.
The country’s largest lender Piraeus Bank worst hit with more than 20% fall, while it reached limit down 30% (29%) at times during yesterday’s ASE session.
“Investors worried that banks may not have enough capital to meet fresh targets on reducing their large portfolios of bad debts,” writes financialtimes.
On Wednesday, the General Index of Athens Stock Exchange closed at 666,84 with losses at -2.10%.
In the first ten minutes of the ASE session on Thursday morning, the General Index turned green with 670 points and +0.50%.
Greek media described the ASE session on Oct 3 2018 as “Black Wednesday” that reminded of the days in the first half of 2015.