Net borrowing of listed firms to rise further

The net borrowing of the 199 companies listed on the Athens Exchange increased a notable 11.7 percent in the first half of the year, reaching 22.29 billion euros against 19.95 billion a year earlier. Long-term borrowing rose to 20.9 billion on June 30, from 18.8 billion at end-June 2016.

The increase in net borrowing, which is the difference between total bank dues and cash availability, is mainly due to the releveraging of bank borrowing that healthy enterprises in the large- and mid-cap categories opted for in the period from July 2016 to June 2017. This was intended to support their investment programs regarding their entry into new markets abroad, the buyout of rival enterprises or upgrading production lines.

Several enterprises also proceeded to capital return to shareholders, while the high tax rate (29 percent) forced many companies to raise their borrowing levels in order to meet their tax and social security obligations to the state.

That picture is expected to deteriorate further in the second half of the year, when market officials see total net borrowing approaching 24-25 billion euros.