Greece to extend stock short-selling ban: regulatory source

Mr. Gkoutzinis added that for investor confidence in the Greek market to be rekindled, the risk of Greece exiting the eurozone, and the risk of Greece defaulting on its financial liabilities would need to be off the table “once and for all”.

Foreign investors may trade freely, however.

The Greek economy has shrunk for two straight quarters and may contract as much as 4 per cent this year, according to a July 29 report from the parliamentary budget office.

The Finance Ministry cleared the way on Friday for the exchange to resume operations by issuing a decree setting out new trading rules for local investors.

Bank stocks, which make up a fifth of the main Athens share index, are expected to be hit particularly hard, after the lengthy bank closures and imposition of capital controls, as the radical Syriza government sought to prevent the country being forced out of the euro.

Attention will be focused on Greece’s embattled National Bank of Greece (ADR) (NYSE:NBG) on Monday when the Athens stock exchange reopens after a six-week shutdown over the country’s debt crisis.

Technical glitches at local banks, which will be required to enforce the trading restrictions, had further complicated the exchange’s reopening and many securities traders have taken an early summer holiday during the closure.

The resumption of trading comes as Prime Minister Alexis Tsipras negotiates conditions that will be attached to an €86 billion ($US94.5 billion) lifeline to see the country through the next three years.

Another reason for the restrictions is to control the deposit flight that has eroded Greek banks’ reserves.

Talks on a fresh bailout began on Friday, with the reviled “troika” of creditors now expanded to a quartet, as the EU’s bailout fund, the European Stability Mechanism, joined the worldwide Monetary Fund, the European commission and the European Central Bank.

The “GREK” exchange traded fund (ETF) – comprised of U.S. market listings of Greek companies – fell around 20 percent in July.

About 102,000 euros of Greek government bonds changed hands on the Luxembourg Bourse last week, according to Guy Weymeschkirch, head of markets and surveillance at the exchange.

Once the market reopens it will have the new stock of blue chip Viohalco listed, following the absorption of Sidenor, as Hellenic Exchanges decided this week.

Trading on the Athens bourse was suspended in late June as part of capital controls imposed to stem a debilitating outflow of euros that threatened to collapse Greece’s banks and hurl the indebted country out of the euro zone.