Gains of 12 to 65 price basis points were recorded on the Greek electronic secondary securities market (HDAT) in June compared with the previous month, coupled with a parallel downward move of the yield curve. The 10-year benchmark bond closed at 98.59 (yielding 5.54%) in June from 97.94 (5.63%) in May, narrowing the average spread over Bund to 46 bps from 47 bps respectively. The turnover amounted to EUR 21,127 million down from EUR 28,030 million last month.

Over the first half of the year, the Greek market succeeded in holding on to its gains more in the shorter end of the curve than in longer-maturity bonds, which were affected by the negative sentiment in the European markets especially during the last two months. Yields declined by 4 bps (20y) to 40 bps (3y), resulting to a steeper yield curve. However, the domestic market moved on a more positive ground compared with the rest of Europe, as reflected in the considerable tightening of the average spread over the Bund to 46 bps in June 2001 down from 63 bps in December 2000, reaching record low levels (43 bps) in May. Moreover, over 1H01 the total turnover on HDAT rose to EUR 126,623 million (monthly average EUR 21,104m) versus EUR 29,944 million (monthly average EUR 4,991m) in the same period last year.

In general, the positive performance of the domestic government bond market in the first half 2001 was underpinned mainly by (a) Greece's joining the euro-zone that resulted in the elimination of exchange risk, (b) the consequent upgrading of long-term credit rating to A from A- by Standard & Poor's (March 2001) and Fitch IBCA (June 2001) given the positive outlook of the Greek economy, (c) the Ministry of Finance's supplying adequate liquidity in benchmark issues, (d) looser monetary conditions in international markets, and (e) granting Primary Dealer status to international financial institutions not established in Greece, which participate in HDAT directly from their offices abroad, mainly London, by remote access.