National Bank of Greece SA (NBG) shares are down 1.4% today at $4.10 and we have seen 3.15 million shares trade hands after Noon EST. The average volume is now 2.75 million shares, but that average is far higher than it used to be. Just last November a very active trading day was about 500,000 shares.
MarketWatch was talking this morning about overseas opportunities in the Greek crisis by looking at the cash-rich companies… they even noted that NBG “…is a top pick at Piraeus because of its geographical diversification and balance sheet strength” and noted other local companies as well.
The problem is not just today. The new socialist government has been forced to break its election promises. The new more conservative promises can be made today, but what assurances are there that the government won’t buckle at home under pressure. It is also going to take a miracle to get the Greek population to play by normal rules such as paying the full list prices on the tax records for items. And the unemployment situation is front and center at a time when tourism money is not flowing in as much as it used to. There have been strikes over the cuts in benefits, and mark these words: those strikes are not the last you have seen.
Investors learned a lesson by betting on bailouts prematurely here in the U.S. Many banks here were allowed to disappear entirely. Greece can get a bailout today or next month. But the worries go far into 2011 and 2012 and beyond.
The traders are the ones that nibble into the ADRs for now. Investors probably do not mind paying more later, but they don’t want to walk in one day and find that their ADR is worth $1 or worse.
JON C. OGG
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