Italians break bonds

For some of fellow guests in Tuscany, taking stock had a rather more literal meaning since it meant a cellphone call to their stock broker, just to check out the latest market movements. Around the communal dining table, Italy_s leading financial daily, Il Sole 24 Ore, was in great demand as anxious investors surveyed the market. If there was one interesting socio-economic development in Italy in 1999, it was the arrival of the small private investor in the marketplace. With government bonds now yielding an average 3 per cent annual return, the private investor has jumped enthusiastically at offers such as last November_s initial public offering of 35 per cent of shares in state-controlled electricity giant, ENEL. A record 3.8 million Italian savers plus a host of international institutional investors jumped onto the ENEL bandwagon, in the process pushing the overall market capitalisation of companies listed on the Borsa Italiana to ?448 billion, thus seeing Milan overtake Amsterdam to become Europe_s fifth largest stock market. Not for nothing did economic commentators label the ENEL privatisation (or semi-privatisation, since the state still retains a 65 per cent controlling interest) an historic moment for Italy. Economic commentators, especially non-Italian ones, like to express concern and scepticism about the Italian economy.