Thousands of investors have been driven out of the mutual funds market after the outbreak of the war in Ukraine and the worsening of the energy crisis, while sales of new shares have also fallen sharply.
As banking sources point out, this behavior is directly linked to the course of stocks and bonds.
“Just as at the beginning of the pandemic in 2020 when the markets collapsed, so since last February, liquidations have been recorded, while new production has also been limited to very low levels” bank sources underscore.
Statistics from the Association of Institutional Investors are indicative of these trends. In the five weeks after 20 February, net outflows had exceeded 100 million euros.
Thus, all capital that had been placed in mutual funds since the beginning of the year until that moment (net inflows of 96 million euros), returned to bank accounts.
With the recovery of markets in April, investors returned, but new liquidations occurred due to the climate of instability and uncertainty that prevailed.
Thus, in June the net outflows reached 50 million euros, while in July, in just 6 working days, outflows reached 14 million euros.
A problem for the banks
This fact creates a concern for bank administrations, as it not only burdens their results with additional interest costs, since the product of liquidation is placed in deposit products, but also creates obstacles to the execution of the business plan that relies to a large extent on the strengthening of supplies from sales of investment programs.
The movement in the mutual fund market explains to some extent the rise in bank deposits in the same period. According to data from the Bank of Greece, in the four months of February – May 2022, deposits belonging to individuals increased by 1.13 billion euros.
During the same period, the decline in long-term deposits slowed down to a remarkable extent.
In particular, the net outflows from approximately 900 million euros on a monthly basis in 2021, were limited in February and March to the levels of 440 million euros and in the two months of April – May to 240 million euros.
As a bank source notes, “if we were to offer interest rates of 0.20% or more today, I believe that time deposits would have already entered an upward trend.”
Latest News
Retail Sales in Greece Up 0.8% in Q4 2024: ELSTAT
Retail businesses in the food and fuel sectors posted a turnover of €6.82 billion in Q3 2024, a 1.2% increase compared to €6.73 billion in Q3 2023
September in Greece Winning Tourists Over from US, Germany
Tourists continue to visit Greece off-season into Sept. with the number of inbound travelers up by 6.6% and a 7.9% rise in travel receipts.
Bank of Greece Governor Says EU will Retaliate to Trump’s Tarrifs
The Bank of Greece Governor defended the independence of central banks amid criticism from U.S. President-elect Donald Trump, who had publicly commented on Federal Reserve Chair Jerome Powel
September in Greece Winning Tourists Over from US, Germany
Tourists continue to visit Greece off-season into Sept. with the number of inbound travelers up by 6.6% and a 7.9% rise in travel receipts.
Bitcoin Surges Toward $100K Amid Pro-Crypto Optimism in US
According to Reuters, the cryptocurrency surged to an all-time high, briefly exceeding $96,898 during Asian trading hours.
Greek Driver Violations at a Touch of a Button
Traffic offences recorded in the last five years by Greece’s “Driver Behavior Control System” are now available on Gov.gr Wallet
Milan Tops List of Most Expensive Streets, Athens’ Ermou Holds Steady at 15th Place
In Athens, following Ermou Street is the southern suburb of Glyfada and Tsimiski Street in Thessaloniki.
New Gov.gr Service Enables Secure Reporting of Minor-Related Delinquency
It should also be noted that via the recently introduced initiative ‘Safe Youth’ application citizens have access to specially tailored informative material regarding the safety of children and adolescents
Thousands Strike in Athens Over Soaring Living Costs and Stagnant Wages
Inflation, particularly in food prices, has been crushing Greek households
Greece Overhauls Property Valuation System
Greece plans to launch a revamped property value registry in 2025 and overhaul the way objective values are calculated to enhance tax revenue and improve transparency.