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27 October, 2001
Prime Minister Costas Simitis emerged stronger from a ruling party congress, which has reduced political risk and may help to act as a catalyst for the Athens Stock Exchange to rise again, Schroder Salomon Smith Barney (SSSB) said on Friday.
"The prime minister won a clear mandate for his continued leadership of the party, successfully challenging the anti-reformists. This removes the internal political risk that has added to pressure and volatility in the stock market since mid-summer," SSSB analyst Miranda Xafa said in a market report.
The Athens bourse has gained 6.0 percent since the ruling PASOK party congress ended on October 14, strengthening Simitis' position on implementing structural reform to the economy.
"The real issue is whether the highly regarded new finance minister (Nikos Christodoulakis) will get a strong mandate to accelerate reforms and privatization, providing sustainable catalysts to the equity market," Xafa said.
The prime minister had brought the party congress forward to the middle of October from spring 2002, when it was originally scheduled.
At the same time, a sharp 30 percent decline in the bourse since the start of the year has created stock bargains, Xafa said.
"We now have a positive fundamental view on most stocks in our large-cap universe."
SSSB's top picks are Hellenic Telecommunications Organization (outperform, medium risk) and Coca-Cola HBC (buy, medium risk).
SSSB is a member of Citigroup, the world's largest financial and banking corporation.
Source: Athens News Agency