Banking & Finance

ECB 'Actions' & Threat Of Run On The Banks (NBG, GREK, CCH, IRE, STD, BBVA)

The European Central Bank is said to be freezing assets or considering freezing assets or halting monetary policy operations to some banks in Greece as the Greeks consider an exit of the Euro and as the Greeks are creating a run on the banks due to the situation being nothing short of pathetic.  The reports and the interpretation are very mixed here as Reuters threw out headlines which have not been confirmed as of yet.

National Bank of Greece SA (NYSE: NBG) appears to be challenging all-time lows on an adjusted basis as shares are down 12% at $1.51 in active trading.  The Global X FTSE Greece 20 ETF (AMEX: GREK) is down 1.9% at $10.90 and this hit a new low today as Greek shares have reportedly hit lows not seen in years and years.

What is interesting is that Coca-Cola Hellenic Bottling Company S.A. (NYSE: CCH) is actually up 5.3% at $16.25 against a 52-week trading range of $14.75 to $27.40.  This outfit is the bottler of The Coca-Cola Company’s products located in Athens which distributes some 90 brands (including Coke) up into parts of the developed nations in Europe and into Eastern Europe and a few other select nearby markets.

We are seeing a mixed move in other banks in the lands of the PIIGS in ADR trading in New York. The Bank of Ireland (NYSE: IRE) is up 4% at $5.13; Banco Santander, S.A. (NYSE: STD) is down 1.5% at $5.72; and Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) is down 0.7% at $6.24.

Here is a comment from a speech from ECB President Mario Draghi today: “Before concluding, let me comment briefly on the difficult situation in Greece. Since the Treaty does not foresee anything on exit, this is not a matter for the ECB to decide. While the ECB will continue to comply with the mandate of keeping price stability over the medium term in line with Treaty provisions and preserving the integrity of our balance sheet, I want to state that our strong preference is that Greece will continue to stay in the euro area.”

Keep in mind a report from Reuters yesterday from Italian Industry Minister Corrado Passera saying that the Euro could survive even if Greece were to leave the union’s single currency. Trusting anything from any minister in Italy is a hard issues when you consider that Italy is one of the PIIGS and is a larger problem for the Euro than all other four PIIGS combined.

This is one of those situations where wording on headlines has to be closely watched… and interpretation depends upon many things.  Traders and investors will shoot first and ask questions later.

JON C. OGG

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