Evolution and opportunities in the Greek capital market

Dr. PANAYOTIS ALEXAKIS

President of the Athens Stock Exchange (ASE)

and the Athens Derivate Exchange

Ladies and Gentlemen,

Please, allow me to take this opportunity to present to you the case of the Greek capital market.

We have set two basic objectives for our market, namely:

1. To operate a deep and liquid market.

2. To take all necessary actions in order to maintain standards similar to other EU capital markets.

Our vision is for a strong, safe and reliable exchange.

What we have experienced in recent market is an impressive record of development of the ASE, the volume of transactions, the number of listed companies and capitalization. This progress has taken place within the broader context of financial liberalization in the EU, which very much affected Greece, bringing along institutional changes and an internationalization of the Greek capital market, in terms of funds flowing into and out of the market, as well as in terms of events influencing it.

The structural reforms and the on going privatization process undertaken in Greece, as well as the sound macroeconomic polices and the dramatic improvement of Greek macroeconomic variables and the very positive sustained growth prospects for the economy and the Greek companies, assisted by the investment projects through the European Union structural funds and the 2004 Athens Olympics, estimated to go beyond the year 2005, we believe that they provide the appropriate mix of conditions for the continuous growth of the Greek capital market.

Up to now we have been working in the ASE towards restructuring, modernizing and expanding our market, aiming at offering an environment which is comparable to that of the developed international stock markets. All these endeavours focus on three basic directions:

1. Firstly, they refer to the restructuring of the legal and regulatory framework, contributing to the ASE's credibility and transparency. They cover areas such as the modernization of listing requirements on issues such as minimum equity, minimum free float and company previous records, the upgrading of listed companies obligatory disclosure such as financial disclosure disclosure on changes of ownership and corporate governance, the checking of price sensitive news and the use of funds raised through the ASE.

2. Secondly, our efforts refer to the modernization and upgrading of the information technology infrastructure, where three major installations have taken place. These are ASE's wide area network through which trading and clearing services on stocks, bonds and derivatives are offered to the Greek capital market - the efficient operation of our integrated automated electronic trading system - which offers competitive, transparent and high standard functionality to our members and investors, as well as increased trading capacity - and finally the operation of a dematerialized shares system.

3. Our third major effort is concentrated on the creation and introduction of new products, so that investors are provided with innovative investment alternatives. These refer to new indices in co-operation with FTSE, the operation of the Athens Derivatives Exchange, with futures and option products, the creation of the new market in the context of Euro N.M., the utilization of one of Greece's comparative advantages by creating the framework for the listing of merchant shipping companies, the market for secondary listings in ASE, and the introduction of instruments serving emerging markets of our region, offering an environment where GDR's and other products can be introduced in ASE. We encourage international cooperation in our region (SE. Europe and S.E. Mediterranean) where we also foresee regional indices and the operation of a single market on the listing in ASE of companies with high liquidity prospects.

It is not coincidental that, due to these qualitative and quantitative changes, the Greek capital market leaves the emerging market status and enters that of the developed I mature markets. International, highly respected investment houses have started declaring the market as a developed one while the Morgan Stanley Cl has announced its decision to upgrade our market, as of May 2001.

For all of us involved in the Greek capital market, the effort for an even more efficient market, naturally, does not come to an end. We continuously work on action plans in order to always achieve and enhance this objective.

Such plans relate to, among others, the new organizational structure under implementation for the ASE, by strengthening the divisions of listed companies and market surveillance, the creation of a business development division with marketing, sales and R&D departments, the further rationalization of our group of companies - such as the merging of the Athens Derivatives Exchange with the ASE and the enhancement of the role of the derivatives clearing house to act also for the stock market - and of course our holding company - Hellenic Exchanges SA - which is already listed on the ASE.

In addition, the changes involve further modernization and flexible improvement of our institutional and operational framework, the replacement of laws and ministerial decisions by an operational rulebook for the ASE, our members, the listed companies and investors. They also refer to the transferring of administrative authority to the HCMC, in order to allow ASE to concentrate more on business development and also to support the HSMC's supervisory rule. Market reliability and efficiency is also to be enhanced through the on-line, real-time transfer of information on daily trading sessions, from the ASE to the HCMC.

We also work for the timely preparation of our market to function in Euros, as from January 2001, on the introduction of new reforms such as margin accounts and securities borrowing and lending, on further expansion, enrichment of our electronic trading and clearing systems and on the flow of reliable information to the market and the investors, through the upgrading of the telecommunication network that connects the ASE with the listed companies.

We can assure you that we are committed to contribute to this positive and constructive process by seeking even higher levels of safety, credibility and transparency for our market. Simultaneously, we believe that the time has come for foreign investors to come to know more about our market.

We invite you all to consider our market while it will always be with great pleasure for us in the exchange to be at your utmost disposal.

Thank you very much.

ORGANIZERS