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July 29, 2015

Greek stock market unlikely to reopen this week

Greece's stock market will probably stay closed for the rest of this week due to technical glitches at local banks, prolonging a five-week shutdown caused by capital controls, an exchange spokeswoman said on Wednesday.

The Athens Stock Exchange (ASE) has been shut since June 29, when the government closed banks and imposed strict limits on withdrawals and foreign transfers to prevent a run on deposits by savers and companies.

"The stock market will not open tomorrow (Thursday) and it is unlikely to open on Friday. The Greek banks need to resolve some IT issues regarding the restrictions," the spokeswoman said.

The European Central Bank (ECB) gave Greece the go-ahead on Tuesday to reopen the stock market without restrictions for foreign investors, but with limitations for local investors to avert the risk of further capital outflows.

Under the ECB-approved plan, local investors would be allowed to buy shares with existing cash holdings, but not to withdraw money from their Greek bank accounts to buy shares.

Some market participants had warned that unlimited trading for domestic investors would have posed a serious risk for lenders.

Before the exchange can resume trading, the Finance Ministry will issue a decree outlining the limits on day-to-day operations.

The securities regulator's chairman told Reuters on Tuesday that the market could reopen on Wednesday or Thursday following the ECB's approval.