Stock Athens Exchange: Controlled liquidations & a brake on the five-day upward rally

Investors in the Greek stock market were content with selective moves today (10/7), correcting measuredly after a five-day rally that had yielded gains of +3.14%. The General Index was again below 1,450 points, but did not move far enough away from this psychological threshold.

More specifically, in Wednesday’s session, the GD fell by 6.91 points or -0.48% to close at 1,444.31 points. It moved in a range of about 12 points, namely between 1,440.62 (low of the day) and 1,452.46 (high of the day).

The domestic market kept its distance from the favourable climate prevailing on international stock exchanges, as four listed companies (Piraeus Bank, Jumbo, HELLENiQ ENERGY and AS Company) “cut” dividends, totaling around 500 million euros, weighing on any upward mood. Two of them declined significantly and exerted strong pressure on the board.

HELLENiQ ENERGY and Jumbo, which slipped by about -6% and -3.5%, respectively. On the other hand, GEK TERNA continued its “climb” to peaks not seen in 24 years, with the sale deal of TERNA Energy as a “vehicle”. Axia also played a key role, which in a recent report stated that it “sees” the stock at EUR 27.4. Impressive +20% rally for Attica Bank in the wake of the approvals for the merger with Pancretia.

Dividends and Piraeus

Analysts were expecting the Xetra to come under pressure today in the wake of five consecutive positive sessions. The barrage of dividend cuts from heavyweight listed companies played a major role in today’s profit taking. In particular, Piraeus (EUR 0.063/share), Jumbo (EUR 1/share), HELLENiQ ENERGY (EUR 0.6/share) and AS Company (EUR 0.13/share) traded without dividend rights, resulting in strong losses.

As for Piraeus, payment is scheduled for Tuesday 16 July. This is the first systemic bank to distribute a dividend after 16 years, following the green light from the relevant supervisory body SSM. The other banks will reward their shareholders at the end of this month.

In other news, Piraeus has mandated global investment banks to issue a new green senior preferred bond to further strengthen the bank’s MREL base. The bond has a five-year maturity, callable at 4 years. The bank raised EUR 650 million from the issue, compared to the EUR 500 million originally sought. Demand was high, with bids exceeding EUR 3 billion.

Bullish trends in international markets

The prolonged political uncertainty in France has been a major concern for euro markets, with the local stock market under heavy pressure in Tuesday’s session. Losses of more than -1.5% were recorded by the French CAC 40 and -1.3% by the German DAX. Today euro markets are reacting, with all indices trading in positive territory. Between +0.7% and +0.8% are the indices in Paris and Frankfurt. Around +1.1% to +1.2% for the Italian FTSE MIB and the Spanish IBEX 35.

Stagnation prevailed on Wall Street on Tuesday, with the S&P 500 and Nasdaq nevertheless extending their all-time highs. Jerome Powell’s remarks cultivated cautious optimism among investors. In his Senate testimony, the Fed chairman adopted a fairly moderate tone, leaving the window open for monetary easing to begin next September. His testimony before the House Financial Services Committee follows today. All eyes on June US inflation, which is released tomorrow. Mildly bullish start to the day, with the S&P 500-Nasdaq holding on to record highs.

It was a mixed picture on Asian bourses today, with Japan’s Nikkei index extending its all-time high, further approaching 42,000 points. Traders assessed inflation data from China and Japan. Inflation in China marginally missed expectations, with the consumer price index registering a 0.2% increase in June, weaker than the 0.4% rise economists had expected.

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