The Athens Stock Exchange had only been open for a matter of minutes after its five week hiatus before investors began breaking down into tears as their stocks plummeted.
According to USA Today and Newsweek, the Greek stock market fell by a whopping 23% immediately after opening on Monday, August 3. However, it also climbed slightly to 16% by the end of the day, and as economists and investors have noted, it’s unreasonable to expect a market to do well at all after a five week shutdown.
Among the biggest losers were Greece’s top four banks, the Wall Street Journal reported, which released statements on Monday saying that it was too early to “gauge the impact” of the Greek government’s capital controls on the banks. Nevertheless, it’s clear that the banks have suffered greatly, in part because billions of euros were withdrawn from investment accounts earlier in 2015 despite the government’s attempts to curb its recession.
According to reports from USA Today, shares of the Greek National Bank, which had traded at $27.50 just a few years ago, were traded for $0.09 this past Monday — by the Securities and Exchange Commission definition, these shares were well below the $5 maximum selling price of a penny stock.
The National Bank joined the Alpha Bank, Attica Bank and Eurobank Ergasius, and the Bank of Pireaus as the major European banking institutions which saw a 30% decrease in stock values at the end of the day.
Outside of the banking industry, CNBC reported, there were only a few stocks that actually did well — and even though traders were expecting a volatile re-opening of the Greek market, it didn’t help that the future of Greece’s financial institutions are still in peril.
Greek government officials have been attempting negotiations with European Union (EU) leaders and authorities from the International Monetary Fund (IMF), but the country’s third bailout package, along with strict austerity measures, has been the center of controversy on a global scale.
In a matter of weeks, Greece will owe the European Central Bank a 3.2 billion euro payment; at this point, no one is expecting Greece to make its August 20 deadline, nor are there high hopes for a reasonable bailout package to make its way forward.
But one thing has become clear: if Greece’s stock market doesn’t stabilize soon, and if Europe isn’t able to create a bailout package that Greek leaders accept, the entire global stock market will be in jeopardy.