Greek ETF Is Open For Trading In Stuttgart

Despite the Athens Stock Exchange being closed, investors can still buy and sell the ETF on one exchange in Europe

Editor, Europe
Reviewed by: Rachael Revesz
Edited by: Rachael Revesz

Investors in the Lyxor Greek Equity ETF (ticker GRE) can still buy and sell their shares on the German stock exchange in Stuttgart, it has been announced, the only venue left in Europe to continue trading activity while the Athens Stock Exchange remains closed during economic turmoil.

In a statement released 21 July, the Boerse Stuttgart said it has seen “active” retail trading over the past three weeks. Lyxor decided to halt creations and redemptions of its fund units on 29 June when the underlying markets closed, and stock exchanges across Europe were quick to shut down secondary trading. This meant investors were effectively stuck in the fund.

However, Michael Görgens, head of fund and bond trading at Boerse Stuttgart, said in a statement that investors can still trade on the secondary market on their order book, with no input from market makers, and the ETF price will be set based on supply and demand.

“On the one hand, many retail investors are keen to offload their holdings because of the political uncertainty. At the same time, as the level of demand shows, there are investors out there who see the current risks as an opportunity,” he said.

The release noted that there is enough liquidity to trade. On average, there have been 118 price determinations per day for the ETF over the last three weeks. Over 6 million fund units were traded with an average order volume of almost €6,000, equivalent to around 37 percent of the total number of fund units traded since the beginning of the year.

When the Athens Stock Exchanges reopens – its banks opened on Monday, and commentators presume the stock exchange will not be far behind – ETF prices in Stuttgart will once again be determined with the aid of a market maker, whose role is to track the underlying index by providing a continuous stream of quotes. Gillian Walmsley from the London Stock Exchange expressed confidence this week that once Athens re-opens, the Greek equity ETF should "correct quickly".

The ETF price was halted at €1.16 on 26 June but continued to trade in Stuttgart. The price dropped to €0.94 at the start of July, and has since rebounded. Investors are currently betting the price to be slightly lower than when the underlying market closed, at around €1.06.

Andrew Merricks, head of investments at Skerritts Wealth Management, holds a small amount of personal pension money in the ETF, but none for clients, and said he was "well aware of the risks". He added that he thought it was a good thing that the ETF was closed on other exchanges, as during this turbulent time in Greece, "you are never going to get a good price".

The country will remain a top holiday spot amongst advisers - Merricks said he heard the ETF news from Lyxor whilst he was on holiday in Greece.



Rachael Revesz joined in August 2013 as staff writer. Previously an investment reporter at Citywire, she has a background in writing content for retail financial advisors and has covered a wide range of subjects in finance. Revesz studied journalism at PMA Media, which has since merged with the Press Association. She also holds a B.A. in modern languages from Durham University, as well as CF1 and CF2 financial planning certificates from the CII.