Greek Stock Market Set to Record a New 20-Year High
Monday, August 29, 2021 9:47 AM

Greek stocks rallied as the ASE General Index get set to rise to a 20-year high on reports of a merger between Greek banks EFG Eurobank Egrasias SA and Alpha Bank SA. The boards of Eurobank and Alpha, Greece's second and third-largest lenders respectively, are convening today to clinch the deal.


The Athens index jumped 9.8 percent to 966.40 at 12:31 p.m. and is headed for its best daily performance since December 1990. The benchmark has slumped 84 percent since October 2007 and is the worst performer in 2011 among 24 developed-market national indexes. The Athens bourse's banking index, FTATBNK, was up 15.8 percent to 605.72 points, outperforming the broader Greek market, which was gaining 7.4 percent. National Bank, the largest Greek bank, added 20 percent to 3.34 euros at 10:40 a.m. in Athens, while the Athens benchmark general index rose 7.1 percent to 942.89. Piraeus Bank SA added 27 percent to 71 cents. The 22-member Cyprus General Market Index soared to a record 18 percent today. Piraeus Bank rose 29 percent to 72 cents, headed for the steepest advance since December 1993. Marfin Investment Group SA, southeast Europe’s biggest buyout fund, surged 27 percent to 38 cents.


Takis Zamanis, chief trader at Beta Securities, said, “The climb is the result of sentiment change in the market and the banking sector, after news of a merger deal between Alpha and Eurobank. More moves are expected.”  Deutsche Bank AG analysts Dimitris Giannoulis and Carlos Berastain Gonzalez state that the consolidation in the domestic sector makes economic sense given the fragmentation of the market. They said, “We would expect the market to react with enthusiasm following the recent pressure on the sector but we maintain our cautious stance ahead of the necessary re-capitalization of the new group.”


The alliance between the two banks would create Greece’s biggest bank, with assets of 150 billion euros ($217 billion), more than 2,000 branches and about 80 billion euros in deposits. Qatar investors, who already have a stake in Alpha, will participate in the new entity.