Greece has been in the focus of investors’ attention: the Athens Stock Exchange has shown impressive results, the highest since the beginning of 2023 among all international indices (+18%), and a wave of capital inflows revived the market thanks to the mobilization of transactions to the front that “awakened” investment interest. At the same time, Greek bonds are showing impressive resilience, with the Greek spread recording the biggest drop in the euro area since the European Central Bank began raising interest rates in July 2022.

The factors that support Greek assets are the favorable macroeconomic environment, also thanks to the flows of the Recovery Fund, with the Greek economy expected to continue to outperform the entire Eurozone, investment grade recovery, which will contribute to the way Greek bonds are included in international indices, which ” controlled by long-term investors, the second year’s upgrade of the Greek stock exchange to developed markets from emerging markets, which were downgraded in 2013 (MSCI) and 2105 (FTSE), and the fact that there is no political risk in Greece. Although the election process is likely to be lengthy, causing market volatility, rating agencies and international investment houses are not worried about the outcome, as they believe there will be a continuation of the path of fiscal policy through the next government.

A.A. approaching 1,100 units and 8.5 year highs, with turnover growing significantly and exceeding 100 million euros per day, while in the recent past it barely exceeded 40-50 million and acquired market characteristics of a “bull market”, with the protagonists on board vary and do not “refer” only to the banking industry. At the same time, it demonstrates protection against intra-session pressure, with any amendments regarding the reclassification of portfolios into securities, and not their flight from the market. As Ilias Zacharakis, managing director of Fast Finance, notes in K, “serious inflows like the current ones were observed from 2013-2014, which abruptly stopped when investors realized that … the ship was turning the wrong way again.” direction”.

The overall index completed nine consecutive weeks of growth, continuing to outperform the previous period compared to major European indices. “This was supported by confirmed interest from foreign investment funds, such as the increase in Fairfax’s participation in the Mytileneos group, as well as a significant influx of foreign investment shares in January, which amounted to about 98 million euros and was the largest since April. last year,” Nikos Kavkas, head of the analytical department at Depolas Investment Services, points out to K.

According to Mr. Zacharakis, hundreds of foreign institutional accounts have recently been opened, and the stock exchange is gradually regaining lost ground in relation to the Greek economy. According to the latest statistics from the Athens Stock Exchange (Axia Numbers), there were 24,442 active codes in AA in January, and 1,141 new accounts have been created since December. Although they are far from the 2013 high of 40,000 people, they have more than doubled since last October. The countries with the highest portfolio value were the United States with 7.57 billion euros, Cyprus with 6.46 billion euros and the Netherlands with 4.64 billion euros.

Recovery of investment grade is the most important parameter of the Greek stock exchange.

Investors are convinced of the Greek story and do not want to miss the uptrend in the next period. “We are optimistic about the price of Greek stocks four factors: a) despite the rally, valuations are low, b) Greece has been disproportionately affected by higher gas prices than in other countries, but this is now changing, c) the opening of China will further strengthen the industry tourism and d) Greece will benefit significantly from the Recovery Fund,” said Sean Darby, equity strategy analyst at Jefferies, at K.

“In 2023, the key positive catalysts are a firmer macro outlook, Greece’s potential upgrade to investment grade, our expectation of a dividend return from the banking sector and strong profitability growth. The main risk is a prolonged election period or an outcome that will lead to an unstable political environment, ”said Alex Buluguris, co-head of Wood & Company, for K.

The return of the Greek economy to the investment stage is the most important parameter of the Greek stock exchange rate, analysts emphasize. An upgrade on the Greek stock exchange will also be “started,” Mr. Zacharakis notes: “When the house moves us to investment grade, it is the banks that win first as a flurry of upgrades follows. For the same reason, the banking sector “works” with a profit of 33% for a month and a half, ahead of the rest of the market.”

The fact that Greece is approaching investment grade is a strong signal for international investors, as they understand that this will allow the country to turn the page – with the stamp of the rating agencies, – emphasizes Konstantinos Zouzoulas, head of the department. K”, conducted by Axia Ventures Group. As noted in the chamber’s recent report, Greece would thus now be in compliance with the ECB’s guarantee rules, a prospect that would broaden the potential investor base for Greek bonds. It will also allow Greek bonds and stocks to return to the lists of some investors who have so far been unable to consider the country. Many long-term portfolios have been kept away from Greece for many years and their quality, size and long-term approach are not on the market.

Explaining the AX rally, Mr Zuzoulas notes that much of it is due to the fact that Greek listed companies performed very well in 2022, but it took time for the market to recognize this due to the energy crisis. “Greek companies seem to be in a different circle than many EU companies. and are supported by their lean structure, the performance of the domestic economy, and the maturity of the investments they have been able to make after years of recession.” So companies actually perform better and become more attractive (in terms of valuation), new capital enters the market, activity increases, and investment levels are the catalyst that attracts more participants.”

Numbers

18% speech by A.A. since the beginning of the year it has been the highest in the world.
100 million. value of transactions in the Greek market on a daily basis.
24 442 today’s active codes with 1141 new accounts created since December.
178 units is the spread of Greek bonds, showing the biggest decline in the Eurozone since July last year.
37.76 billion value of Greek bonds administered by the ECB.