Mid-caps are eyeing the corporate bond market

By Anestis Dokas

Local companies, investors and traders are bracing for the start of operation of the new corporate bond market in the alternative market of the Athens Stock Exchange. Over 15 firms have expressed an interest in participating in the new market, whose advantages include companies being required to present a simple information note approved by the stock market’s administration and not a minimum amount in a bond issue.

Investors interested in participating in the corporate issues will be able to declare via stockbrokerage companies the amount they wish to invest through a central book-building process. The transaction will be conducted via the stock market’s electronic book of offers and will entail a reduction of both time and costs, as well as simplifying the procedure for entry to the alternative market.

The creation of this corporate bond market will serve to support small and medium-sized enterprises that are export-oriented and innovation-driven, as well as companies active in Greece with a good financial structure but unable to secure refinancing due to local banks’ inability to offer their support.

The most important feature the average investor needs to know is that the negotiable corporate bonds behave more like stocks than bonds but have a smaller variability and risk than corporate shares.

Foreign investment funds include Greek corporate bonds in a basket of dynamic enterprises of increased risk that could fetch great profits. The same category also includes companies from Italy, Spain, Portugal, the Czech Republic, Poland, Bulgaria and Romania. What hedge funds care for that the countries in which the companies have the right economic conditions to guarantee the smooth operation of listed...