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
Mini Holiday Season in Greece for Upcoming Orthodox Easter
Occupancy rates reach up to 90% domestically for accommodations open ahead of peak summer season
Greek PM Mitsotakis Says Fight Against Inflation Ongoing
The Premier made statement during a visit an an open vegetable market
Unpaid Taxes in Greece Reach 1.539bln Euros
As the figures revealed the number of debtors totaled 3,878,712 individuals and legal entities.
ELSTAT: Greek Primary Surplus Reaches 1.9% of GDP in 2023
Greek debt saw a slight dip to 356.7 billion euros by the end of 2023, down from 356.8 billion euros a year prior
Study: Greece in Top 5 Hotel Investments in Europe
As previously reported by OT, more than 60 hotel projects are set to be developed in Greece over the next four years
GEOAXIS Report: Office Rents Surge by 40% in Ten-Year Span
Geoaxis estimates that the different dynamics in the office market will continue into 2024/2025, predicting stability for older offices, increased demand for renovated spaces, and a slowdown in the rise of rents for modern, green offices
Greece: ‘Godparents’ Basket’ Debuts Today
As part of the program, Greek retailers are obliged to identify the lowest prices of certain categories of products traditionally purchased as Easter gifts by godparents for their godchildren between April 22 until May 4
Brain Waste in Greece: 22.74% of Migrants Overqualified for Jobs
Almost half of all college-educated migrants in Europe are overqualified for their jobs and twice as likely as natives to be unemployed, according to Lighthouse Reports
AB Vassilopoulos Supermarket Vies for 2nd Place in Greek Market
AB Vassilopoulos hopes its focus on its private label, addition of 2-3 company supermarkets and another 50 franchises will help it surpass LIDL
Greek Youth Struggle Amidst Low Wages and Soaring Expenses
Furthermore, 52.7% of respondents attribute Greece's current significant issues to governmental failure, while another 49.1% anticipate continued economic hardship in the nation's future