The Athens Stock Exchange market cheered the election results and the ruling party’s landslide victory, ignoring the ND’s confidence in the next election and maintaining fiscal discipline that would bring a long-awaited return to investment grade.

Earnings and turnover soared thanks to bank stocks and PPCs, and the overall index topped 1200 for the first time since July 28, 2014 at 1213.31.

The overall index closed up 6.09% to 1201.32 points. The amount of transactions amounted to 360.22 million euros, while 102,165,926 shares were sold. The banking index closed with an increase of 12.47% to 991.41 points.

Analysts at AXIA note that the Greek market continues to trade at favorable multiples relative to other markets, while some stocks are listed that would be more favored by political clarity (PPC, HelleniQ Energy and National Bank). In addition, the continuation of procedures initiated before the elections will benefit companies in the construction and infrastructure sectors, as well as EYDAP.

At the same time, Greek government bonds also recorded a rally, as investors are positive about the election results. Earlier, Greek 10-year government bond yields fell 16 basis points to 3.79%, while German bond spreads narrowed to 138 basis points for the first time since January 2022.

Picture on the dashboard

The Large Cap Index rose 6.95% and the Mid Cap Index rose 3.85%. Of the highly capitalized shares, the largest growth was recorded by shares of KPP (+15.93%), Ethniki (+15.30%), Piraeus (+13.50%), Alfa-Bank (+14.17%) and Evrobank (+8, 50%). %), while Mytileneos closed at +7.74%, Lambda at +6.88% and shares of Hellenic Petroleum, ELHA and EYDAP rose by more than 5%. In contrast, only the share of Coca Cola HBC (-0.89%) recorded a decline.

Of the individual indices, the largest growth was shown by the indices of banks (+12.47%) and utilities (+10.62%), while the food (-0.86%) and health indices recorded a fall (-0.28%).

The largest volume of transactions was represented by Alfa Bank and Piraeus, trading 31,183,720 and 24,636,066 shares, respectively. The largest amount of transactions was recorded by Piraeus with 66.10 million euros and National with 61.24 million euros. 105 stocks rose, 17 fell and 8 remained stable.

The path to the investment stage is open

The results of yesterday’s election are estimated to set the stage for a rating upgrade and a return to investment grade, 13 years after Greece’s rating was downgraded to junk, signaling continuity to reforms and fiscal policy to rating agencies. In fact, according to some analysts, things could accelerate as the Fitch review, scheduled for June 9, takes on increasing importance.

Eurobank Securities expects a sharp revaluation of Greek assets after, as it points out, the last hurdle, which was the elections, is overcome. According to stock market analysts, the comfortable independence of the New Democracy after the second election, from the point of view of the markets, is the best possible scenario for policy continuity, reform and financial prudence. At the same time, this leaves room for an upgrade of the country’s credit rating earlier than the market expected, with the next catalyst being the June 9 Fitch review.

In addition, Alevizos Alevizakos, General Manager of Axia Ventures Investment Services Group, estimated that Greek investment will show a big jump with good transaction volumes in the next period. He notes that the election results support Greek assets in both the short and long term. International analysts said, according to Reuters, that given bailouts from the EU and today’s low cost of debt servicing, the Greek government could cut its debt-to-GDP ratio significantly, which is critical to recovering investment grade. They also noted that Greece has already reached a primary surplus in 2022, and the European Central Bank’s rate hike cycle has less of an impact on the Greek economy.

Source: money review