A positive catalyst for them Greek investors was characterized Axia Ventures The size of her victory New Republicwhich leads to the expectation that second election get an absolute majority. And this is due to expectations of continued structural reforms and market-oriented government policies at a time when the economic outlook for Greece is already strong and valuations Greek shares short.

The events “clearly show not only that the political risk in Greece is very low (lower than in most countries of the world), but that the country will continue its reforms, a path that has already allowed Greece to increase its competitiveness and claim to economic development at stakes much stronger than her average Eurozone“, – emphasizes Aksia.

Greece has entered a growth cycle and the market hasn’t priced that in, he characteristically notes, adding that Greece may be able to recover. investment grade Better sooner than later.

The elections forced several chambers to take a wait-and-see attitude towards Greek bondsafter the strong results of the last period, as they calculated that, based on the polls, there will be a period of instability in the market with a possible scenario of delaying further modernization of Greece by houses.

In addition, hedge funds sharply increased their bets on Greek bonds last week ahead of the election – and to the highest level since 2014 due to concerns about the possibility of post-election “political paralysis”.

However, the results of Sunday’s elections led to a sharp change in both the positions of the funds, as was evident from yesterday’s rally, and the mood of analysts. OUR Citygroupin particular, noted that this absolutely supports the further outperformance of Greek bonds.

“New Democracy won the polls and improved its percentage compared to the 2019 elections. While this was not enough to gain independence, a repeat of this result would have ensured victory in a second election as bonus seats are reintroduced,” he said. o Aman Bansal, US bank analyst. “Greece is now likely to see a continuation of policies that support strong GDP growth, primary surplus and debt/GDP reduction.

This strengthens the case for raising its valuation to investment grade, which would then open the door for Greek bonds to be included in the major international indexes and encourage “cutting” ECB guarantees. Therefore, we are changing our minds and, despite the already sharp tightening of the Greek spread, we expect further significant narrowing in the near future,” concludes Citi.

Further improvement “sees” and Societe Generale. Strategic analyst at a French bank, Sean Koo, saying “K” notes that in theory, since Greece’s rating is lower than Italy’s, Greek 10-year bond yields should be higher.

However, markets tend to move faster than at home and price Greece up to investment grade, so the spread between Greece and Italy is negative and the largest ever recorded (44bp). Greece is not expected to improve significantly compared to Italy, but Greek bonds are expected to improve compared to German bonds, Coe said. In the event that Greece restores investment levels, the Greek spread will shrink by another 35 bp. O.

From the side JP Morgan, which has remained neutral on Greek bonds in the short term due to election risk, stressed in a short note yesterday that “a second mandate for N.D. this is the surest guarantee that Greece will stay on track to meet its financial and reform commitments. Therefore, we continue to expect continued and strong growth for the Greek economy.”