Two Greek banks dropped from top European equity index

7

By Blaise Robinson

Greek lenders Bank of Piraeus and Eurobank will drop out of the pan-European STOXX 600 benchmark, index compiler STOXX said, potentially depriving them of investment flows at a rocky time for Greek’s economic future.

Despite a recent rebound, shares in the two banks are down around 65 percent since February 2014, hurt by worries over Greece’s debt pile.

The demotion from the benchmark index means the shares will be dropped from exchange-traded funds (ETFs) and index trackers replicating the STOXX 600, resulting in a fall in liquidity for the stocks.

According to Societe Generale analysts, the deletion would mean ETFs and funds having to adjust to the change would sell 10.1 million Piraeus shares worth around 6.2 million euros ($7.1 million), and 47.5 million Eurobank shares worth 7.1 million euros.

Piraeus shares were down 6.6 percent and Eurobank down 4 percent on Wednesday morning, giving up a portion of gains made on Tuesday after Athens delivered a list of economic reforms to the euro zone that helped it secure a four-month extension of its financial rescue.

The two banks have a market value of 4.2 billion euros and 2.5 billion euros, respectively.

Bigger rivals National Bank of Greece and Alpha Bank will remain in the STOXX 600.

The index provider, which uses criteria such as market capitalisation and free float to rank stocks, said Rhoen Klinikum, Premier Oil, Ophir Energy, Hunting and Nutreco will also be dropped from the STOXX 600.

AMS, Faurecia, WH Smith, Beazley , Duerr, Restaurant GRP and Grafton will be added to the index.

Changes will be effective as of the open of markets on March 23.

Share.

About Author

  • All is good…

    I don’t think that they are being potentially deprived of outflows (certainly a better investment opportunity for someone)…

    But then I’m sure some wizard/genius will produce some irrelevant statistics that seemingly prove otherwise !

    • Road Warrior

      The banking equivalent of the CTO (if there is one) ,will probably insist that all is well and business booming with massive deposits expected anytime !

      • All is good…

        So long as you remember that there is no plan B

        • Road Warrior

          There’s not a plan A either !

          • Slomi

            🙂

  • Brian Whiffen

    the noose is getting tighter, with residents getting as much as they can out of the system and now this which will put a strangle hold on them, things will get harder for Mr Average Greek

  • konstabo

    if Greece does renege on its commitments its possible that others may follow , and the downward spiral could be devastating for the euro….the ratings agency’s just work for the big bankers…they say whatever they are told to, the idea is to defame and destroy anyone who apposes them….
    the bankers and the eurocrats wants the poor people the taxpayer to pay for there bankers and the govt.s mistakes so that they may not suffer any losses….its better if we all work together and spread the misery to everyone , like they do in the USA….instead we would rather be right and destroy everyone and everything to prove it….