Greek's economy has been suffering for quite some time now and just recently, opened their stock market after five weeks of shutdown. Much to their dismay, few minutes after opening the market, Greece's stocks fell down a 22% mark which caused 10 billion euros to be wiped out within 40 minutes of opening the market.
Bankers said that this happened due to investors' fear of bankruptcy if they invested in Greek businesses and banks. Analysts also added that Greek's stocks exchange will further drop even before it recovers. According to Luca Paolini, Pictet Asset Management's chief strategist in London, "The situation in Greek equity markets will have to get a lot worse before it gets better." Banks, gaming giant OPAP, main electricity provider PPC, top telecoms operator OTE and leading refiners HELPE suffered the most for they lost almost 30% in the opening of the market.
According to an analyst from Beta Securities, this loss is not unexpected for this is a big risk especially for the major investors and "the market has not been closed for more than a month since 1974."
In addition to the market's drop, almost 40 billion euros has been withdrawn from banks since December 2014 due to fear in Greece's falling economy. Athens' last trading session was on June 26 ending a few hours before Prime Minister Alexis Tsipras announced a referendum about the strict aiding rules demanded by Greece's international collectors. This caused panic among the Greek which made them withdraw their money from the banks which led to the government implementing capital control effective June 29. It was also later announced that banks and the stock market will also be closed.
Despite of banks' opening last July 20, the government still restricted the withdrawals and money transfers to different countries.The government's capital controls made the companies to send their employees on mandatory vacation. Importing of good is also affected which raises the fear of having shortages coming autumn.