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Greek spread index marked new historical record - reaching 1000 points

07 May 2010 / 13:05:36  GRReporter
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Greek spread index marked a new historical record by reaching 1000 basis points on the international markets. Thus, interest on the 10-year Greek government bonds is currently 11.3 per cent. Analysts explain the jump of the index with investors’ uncertainty about the future of Greek economy. "At the moment nobody is able to assess how the situation will develop in Greece. Success from the IMF and EC aid package is not guaranteed at all,” said for GRReporter a famous Greek economist. The frequent strikes, riots in downtown Athens, which even took three casualties and the political turmoil that followed the vote in parliament on financial stabilization package, are sure predictors of political and social instability in Greece in the eyes of investors.

Together with the spread-s, the cds-insurances marked upturn, because of the increasingly growing fear that Greek economic disease will spread to other south European countries. "Investors do not simply balance cds-insurances, but they also start selling government securities. It seems that investors convert their wallets by taking into consideration the regional risk," explains for Bloomberg agency Azis Sanderdzhi from Barclays Capital.

Meanwhile Fitch lowered the credit ratings of three Greek banks, by retaining the negative outlook for their development. These are the National Bank of Greece, which rating fell from A+ to A-, Alpha Bank - from AA- to A+ and Marfin Egnatia - from AA- to A+. The agency explained the decrease with the overall financial uncertainty that currently prevails in Greece.

Descending during the day was also the Athens Stock Exchange index which lost 2.37 per cent of its value and stood at 1638.71 points.

Tags: Greece crisis economy IMF stocks spread index
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