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Global investment funds again in Athens

09 August 2015 / 18:08:05  GRReporter
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Big foreign funds, which have invested in Greek listed companies, and especially in Greek banks, look apprehensive. Amid the recapitalization and serious decline in stock prices in the last few days, senior investment fund managers have arrived in Athens to examine the situation and do whatever they can to shore up their investments, or at least what's left of them.

According to Kathimerini's sources,  people working for John Paulson, Wilbur Ross and other celebrity investors were spotted last week around Syntagma Square, having come to meet up with government officials and form their own opinion about what to do tomorrow. The same sources indicate that investors have requested a meeting with the deputy prime minister and head of the cabinet's economic team, Yannis Dragassakis, but wound up having a meeting with economy minister Giorgos Stathakis instead.

During the meeting, they were probing for insights into future developments, so that the process of recapitalization may not put their investments in Greek banks under the threat of extinction.

Those investment funds have a serious foothold in nearly all systemic banking groups, which in some cases (Eurobank) can be described as iconic. Consequently, the losses they might sustain after the recapitalization could be catastrophic for their presence on the Greek market.

It is not known for the time being what the government has committed itself to, if anything. The only information Kathimerini was able to get is that "understanding was expressed" officially.

International funds fear dilution of their investments in Greece and are trying in every way to avoid it. Reportedly, their envoys have not yet departed from Athens, as they are having a series of meetings with market players and senior executives of the banking and other sectors.

Anybody, who has closely monitored their line of behaviour, can confirm that since mid-spring, these funds have been trying in every possible way to decipher Greece's political and economic charade, and thus map out their own policy for the future. The fact is that they have sustained losses (serious ones, as far as their bank investments are concerned), and although they operate in hundreds of billions of euros, the tremors are palpable for them as well.

Until recently, the funds were trying to figure the lay of the land by talking to Greek bankers and other market players, exchanging emails and keeping a distant eye on events through the media. Now they realise this is not enough, because their local investments worth millions of euros are on the line.

Bank stocks

As a whole, the Greek situation, e.g. the retaining of capital controls for a second consecutive month, combined with the 'sinking' of the Athens Stock Exchange, where bank stocks were particularly hit with millions of sale orders, are causing profound concern in the headquarters of the Greek companies.

Immediately after the stock exchange reopening, the mass exit of foreign investors from Greek positions caused panic. Outstanding sales orders reached nearly 1 billion shares during the first three sessions, triggering a genuine Armageddon and dipping bank shares to historically low levels. The devaluation of corporate assets (€10 billion of book-keeping value were lost within three days, with the banks to account for most of it) shows a total lack of confidence in the Greek economy and the sharp rise in risk for the country.

Tags: investment funds Greek banks recapitalization risk investments
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