Yesterday’s trading session at the Athens bourse reflects the negative psychology currently affecting the stock exchange and Greek economy. Interestingly, analysts and investors are linking the share price of main power utility PPC to the overall prospects of the Greek economy.
Taking this correlation into consideration, the 15 percent loss in value of PPC’s share price over the past week, which has reached as much as 25 percent during trading, acquires particular significance. If looked at over a wider time span that includes the six-month high of 5.40 euros struck by PPC’s share last November, then the loss exceeds an alarming 50 percent. This plunge fully reflects the deterioration of Greece’s economic condition over the past few months, which has prompted renewed uncertainty and delays in the latest review by lenders of the country’s bailout program.
Yesterday’s closing price of PPC’s share, which ended the session at 2.68 euros, is just four cents over its 52-week low. This share price brings the utility’s worth down to a meager 621.76 million euros, well below the level it should be at, considering PPC’s corporate stature.
This is clearly an undervalued and non-reflective evaluation of PPC’s true market worth, one that primarily reflects the market’s psychology, as well as certain issues linked to the utility, such as the uncertain future of its subsidiary firm IPTO – the power grid operator – the alarming level of arrears owed by consumers, and the utility’s lack of competitiveness.
Yesterday, PPC’s share gained 1.52 percent, backed by a trading volume of 2.1 million euros. During the session, it fell to as low as 2.34 euros and peaked at 2.80 euros before closing at 2.68 euros for the day.