Athens News Agency: News in English, 08-03-03

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] Interview: ASE head Kapralos

[01] Interview: ASE head Kapralos

To a question on whether the ASE could comprise an acquisition target, Kapralos noted that all prospects were possible, particularly given the substantial change in its stock composition and the fact that the proportion of foreign institutional investors in its share capital currently exceeds 64 percent.

To a comment on the strong fluctuations in money markets internationally following a positive year in 2007, Kapralos said that thespiralling oil prices, the US sub-primes crisis, the devaluation of the dollar parity against the euro, and the prospect of a recession in the US economy in recent months hve composed a picture that creates strong insecurity among capital managers and a decline in the disposition to take on risks.

This, he explained, immediately sparked a wave of liquidations on the stock markets globally.

The Greek stock market operates in an internationalised environment and has for some time been linked with the "charriot" of the developed markets, he continued, explaining that this, on the one hand brought a series of advantages to the ASE, such as an increase in the market's liquidity in the past years, but on the other hand it marked a direct correlation of the course of the Greek market with the international markets, a phenomenon that has been strongly observed since the beginning of the year.

It must be understood, therefore, that with globalisation, the markets operate like "connecting vessels" and that the ASE will be afeected by the problems in the international economies, he said.

Kapralos opined that the problem is larger than initially believed by investors, did not know whether the banks have yet revealed the total losses suffered from sub-prime mortgages, while on the other side the issue that arose with Societe Generale and the 5 billion euros 'black hole' gave rise to strong concern over the "collateral losses" of the credit institutions from the correction of the stock markets.

However, the message for the Greek economy and businesses was one of "contained optimism" for the current year, Kapralos said, opining that the corporate results of the first quarter will be indicative for the course of the markets.

As soon as things settled down internationally and the uncertainty eased, liquidity would return to the financial markets and the stock markets will recover, Kapralos predicted.

Given statements of his in the past that the Greek money market must become more competitive, and asked what the ASE management's plans were in that direction, Kapralos said he considered that this was the last opportunity for abolition of the tax on stockmarket transactions.

He said this tax was a Greek 'novelty' and comprised a substantial proportion of the overall cost of transactions. Consequently, the existence of this tax gives substantial incentive to the Greek market's competitors to begin making transactions on Greek stocks abroad, where they do not have to pay that tax.

Kapralos expressed fear that if this happened, all liquidity would be lost by the Greek market, and that it will be exceptionally difficult to gain it back, even if the tax is abolished later. This was why the ASE management insisted on immediate abolition of the tax.

Regarding the competitiveness of the Greek money market in other sectors, Kapralos opined that it was proceeding at a satisfactory pace. In the past few years, substantial work has bee accomplished in that direction, both with respect to the institutional framework governing the Greek market and with respect to the trading hours, the provision of new products and services, and in the reduction of cost of transactions.

Greece was currently at a stage of enlargement, with the introduction of new, modern financial tools on the Greek market, which he said would attract the interest of Greek and foreign investors alike.

Caption: ANA-MPA file photo of Athens Stock Exchange (ASE) president Spyros Kapralos

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