Monthly overview of the markets of Status New Shares and Status Finance – December 2009
12.01.2010
The clear signs of recovery in developed economies have not yet translated into a positive trend for the southeastern European countries in terms of both macroeconomic indicators and financial markets. Expectations that real recovery of growth rates will take place in the first half of next year cools risk appetites of market players. There is still no clear improvement in the reports of most of the leading companies from the region. A certain lagging in the growth of corporate sales and profit due to the strong dependence of export sectors on the recovery of the demand of their trade partners from western Europe.
Despite the growth released from the beginning of the year the markets from the region, excluding Turkey, remain under pressure falling behind western markets regarding compensation of losses from the beginning of the crisis.
The key issue for the financial sector, where Status Finance invests, was the stabilization of the Greek market in December. The downgrade of Greece's rating had an adverse effect on the Greek banking sector. The wide budget deficit and the high indebtedness of the Greek government caused concerns that the future financing of public expenses in the country will be hindered. On the other hand the lower credit rating could reduce the ability of Greek banks to finance their operations through the ECB with the backing of Treasury securities. This would cause liquidity issues for the banking system of the country.
The turbulence of the Greek banking system affected the other Balkan markets. The strong presence of Greek banks in the region transferred the negative bias to other countries into lower liquidity and higher risk.
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