Greece's stock market regains some ground

The Greek stock market regained some lost ground on Thursday (August 6th), rebounding from three consecutive days of losses, which have seen it shed over 63 per cent since re-opening at the start of the week.

However, it still continued to rack up losses, due, in part, to having to carry the burden of two of its constituent lenders remaining under selling pressure from investors. 

While Eurobank and National Bank rebounded, gaining 7.7 per cent and 9.5 per cent respectively, the banking index lost 3.6 per cent as shares of Alpha Bank tumbled 26.8 per cent and Piraus Bank plummeted by 16.7 per cent. 

Athens' large-cap share index climbed 0.86 per cent, with 20 of its 25 constituent stocks making gains. Retailer Follie, OTE Telecom and Titan Cement put in the best performances, adding 4.5 per cent, 2.8 per cent and 1.3 per cent respectively.  

Nick Koskoletos, from Athens-based Eurobank Equities, told Reuters: "The key determinant for bank values remains the outcome of the coming comprehensive assessment by regulators. Trading is expected to remain highly volatile in the interim."

Now, Greek banks must be recapitalised after account holders emptied their accounts of euros during the peak of the debt crisis. This action will dilute the value of shareholders' stock, but it is unavoidable. 

Both the Greek government and international leaders are of the opinion that the recapitalisation must be completed by the end of 2015 to avoid a haircut on large deposits. 

Yesterday, finance minister Euclid Tsakalotos said: "We discussed the recapitalisation issue of Greek banks. They [creditors] want, as do we, to complete the process soon ... by the end of the year."

According to the EU, recapitalisation will come with a hefty price tag of between €10 billion and €25 million.