The Greece country-specific exchange traded fund broke down to an all-time low Monday as Greek equities plunged to their lowest in a quarter-century on the deepening global rout and rising yields.
The Global X FTSE Greece 20 ETF (NYSEArca: GREK) declined 6.9% Monday and slipped to a new low. GREK fell 19.6% year-to-date and decreased 47.7% over the past year.
Greek equities have fallen to their lowest price since 1990 as growing concern over the global market, stalled bailout review and yields above 10% all helped push investors out of riskier assets, Bloomberg reports.
“There’s a complete buyers’ strike across the board today,” George Athanasakis, equity sales director at Pantelakis Securities SA, told Bloomberg. “It’s all about international malaise hitting a very illiquid market, made worse by that spike in bond yields. There’s the risk that if the government’s aid negotiations drag on for much longer, then the banks and the economy will hurt.”
Leading the race to the bottom, Greek bank stocks plunged an additional 24% on Monday, the most since August – Eurobank Ergasias SA, Piraeus Bank SA and National Bank of Greece SA all plummeted over 27%. The banks have been struggling with over 100 billion euros, or $111 billion, in non-performing loans and additional capital controls implemented last summer.
GREK’s largest sector weight is the financial services at 24.2% of the ETF’s portfolio, including 3.3% Eurobank Ergasias, Piraeus Bank 5.0% and National bank of Greece 3.7%.
Yields on 10-year Greek debt rose 61 basis points to 10.18%, compared to 8.29% at the end of 2015. While rates are rising, yields are still short of its peak of around 20% in July after Prime Minister Alexi Tsipras ended talks with Eurozone creditors and called a referendum over the bailout terms.