The political instability in Greece caused by the uncertainty of exactly what the election results on June 17 will be and what they will mean for Greece, the Eurozone and the global economy, collapsed the Athens Stock Exchange. Rumours of the expected bankruptcy of the country, which will be announced as early as this weekend, contributed towards “Black Friday”. The source of this rumour is a Japanese bank, and soon after the release, this information circled Twitter worldwide. Statements by leading European politicians that Greece's place is in the Eurozone, but only after the country makes an effort, which the Balkan country never figures out how to do, contributed to the nervousness of investors. The icing on top of the cake was discussions from yesterday about the inevitable inclusion of Cyprus in the mechanism for financial support under the supervision of the International Monetary Fund and the European Union.
The result was a daily collapse of 3.45 percent for the index of the stock exchange, which led to an end of the day with 485.18 points, which is the lowest value for the last 23 years. In the early hours of the day the stock exchange index stopped at 460 points and then decreased to 445 points. In the upcoming days stock exchange analysts expect the index to fall to even lower levels. The collapse of the stock exchange chases away even quick profit seekers and puts the managements of major Greek companies in despair making them wonder what would happen if chaos, insecurity and political frivolity continue after June 17. The despair is reaching such levels that they doubt whether they will be able to pay the salaries of their employees next month.
The fear of the Drachma's return was evident today on the Athens Exchange. Foreign investors were trying hard to sell their shares. Most unwanted (for the umpteenth time!) proved to be the shares of banks and also large companies, which are considered to be the backbone of the Greek economy. The Titan Company, with its 100-year history on the Greek stock exchange and presence in international markets, suffered its greatest disaster today. Its shares plunged to 10.26 percent in one day and reached 10.5 Euros. The shares of Coca-Cola Hellenic Bottling Company fell by 7.38 percent in one day and reached 11.30 Euros per share. Most companies involved in the joint index of the Athens Exchange and the Financial Times FTSE-20 experienced a fall of between 0.52 and 8 percent.
The Athens Stock Exchange returned to its levels of the period 1987-1989, commented Nikos Kostopoulos, an analyst at Emporiki Bank, for Imerisia newspaper. Due to this crisis his recommendation is to wait for a few sessions of the exchange, before making conclusions. However, if the index fails to jump sharply in the next ten sessions, which would not be surprising for anyone, it will remain in the range of 445-460 points for a long time.