Shares of the Global X FTSE Greece 20 ETF (NYSEArca: GREK) are lower by 4.5% Friday and the lone Greece exchange traded fund continues to labor at its lowest levels since the second quarter of 2012 after the new Greek government said it will not cooperate with the European Union and the International Monetary Fund on a bailout extension.
Greece’s bailout program expires on Feb. 28. Friday’s tumble for GREK has the ETF down 13.4% since Monday, underscoring just how dismal and volatile things have been for the fund this week. On Wednesday, GREK plunged as Greek bond yields spiked as fears of a “Grexit,” a Greek departure from the Eurozone, were renewed. [New Lows for Greece ETF]
“Bank stocks were hit particularly hard, with Piraeus Bank S.A. , Eurobank Ergasias SA, National Bank of Greece S.A. and Alpha Bank AE all falling by more than 25%,” according to the Wall Street Journal.
Those three banks combine for over 21% of GREK’s weight. At 37% of GREK’s weight, financial services was ETF’s largest sector allocation at the end of the third quarter, according to Global X data. On Wednesday, over 2 million shares changed hands in GREK, a one-day record for the ETF, which debuted in December 2011.
That day, Greek five-year bond yielded around 13.5%, but that yield has since risen 155 basis points to 15.05%.
Greece, which investors should remember is classified as an emerging market by three major index providers, is also at risk of another credit rating downgrade. Earlier this week, Standard & Poor’s placed Greek’s sovereign credit ratings on CreditWatch with negative implications. [Greece Gets Another EM Demotion]