Greek stock market greens
Reasons to be optimistic about the Greek stock market
Welcome to another issue of Changing Greece.
This week, we will kickstart a new tradition to this newsletter — inviting domain leaders to expand on interesting contemporaneous topics relevant to Greece. Aligned with the ethos of this newsletter, the hope is to highlight positive stories, optimistic perspectives and future-oriented ideas.
We start with
, an expert in global finance with a very deep knowledge of the Greek market that runs one of the best newsletters on the subject. I have been following their coverage for a while and I personally love their work, learning something new and interesting each time.Enjoy!
REASONS TO BE OPTIMISTIC ABOUT THE GREEK STOCK MARKET
by
The Greek stock market (ATHEX) has reached heights not seen since 2014. Surprisingly, despite perceptions, the ATHEX is currently one of the world’s top-performing markets, boasting a remarkable gain of over 30% this year.
As we navigate through 2023, pivotal developments offer ample reasons for optimism in the Greek stock market for the future.
Positive capital market developments
Optima Bank IPO: The first bank Initial Public Offering (IPO) in 17 years signifies renewed investor interest.
Upcoming Athens Airport IPO (2024): Anticipation surrounds another potential boost to the market by a highly anticipated IPO.
UniCredit Bank’s Stake in Alpha Bank: Italy’s UniCredit Bank investing in Alpha Bank signals international confidence in Greece‘s potential.
Hellenic Financial Stability Fund Divestment: The fund’s divestment suggests Greek banks are gaining strength, enhancing market resilience, and able to stand on their own.
Attainment of Investment Grade status
Two significant events this year contribute to the growing optimism. The elections, which are behind us and provide a sense of stability, and the S&P’s upgrade of Greek debt from junk to investment grade status.
While this upgrade directly impacts the bond market, the positive spillover effect has been evident in the stock market’s consistent outperformance. Historical data on the ATHEX’s performance during investment-grade periods versus junk status supports the notion that confidence in Greece can be restored.
On the election front, though not always the case, the Greek market has historically performed better during years when New Democracy is in the office.
Appealing valuations
Greek stocks maintain attractive valuations when compared to the rest of Europe.
The MSCI Greece Index’s price-to-earnings ratio of 7, half that of the MSCI Europe Index at 13, suggests a compelling investment opportunity despite even the recent stock market gains.
Greece is surpassing broad European equities by almost 40% over the last year, marking one of its most substantial spreads in history.
Institutional support and positive outlook
Investment professionals and portfolio managers are increasingly turning their attention to Greek stocks, following the recent upgrade.
Mutual funds have shown a consistent and steady rise in allocations to Greek equities, signaling confidence in the market.
Stock analysts are bullish on Greek equities, with a majority of covered stocks receiving buy ratings. Trading volume on ATHEX also reinforces the interest, as it has seen the most trading activity since 2014.
Generational buying opportunity
Despite a decade of stagnant growth and stocks still being 68% below all-time highs, the positive momentum and recent developments could potentially present a generational buying opportunity.
Exchange-traded funds (ETFs) tracking Greek stocks offer a convenient and cost-effective way to capitalize on the future growth. Such products are available globally in various regions: Greece, Europe, and the U.S.
Encouraging market participation
Lastly, the hope is that the stock market’s strong performance will ignite interest among the Greek population. With one of the lowest market participation rates globally, initiatives like the ATHEX’s global roadshows aim to raise awareness and boost both local and foreign involvement.
The Long Road Ahead
While there is obviously quite a bit of optimism displayed here, it’s fair to put things in context. These developments are positive on margin but the reality is the Greek market is still 70% below where was it was in during its height, trading remains only a skeleton of its former self and market participation is near all-time lows, so the road ahead is still long.
Trust in Greek capital markets is razor thin and rightfully so, as many have been burned by scandals and manipulation in the past. Most continue to view the stock market as a casino rather than a wealth building tool.
That said, Greek stock market's recent achievements, coupled with positive indicators, suggest an encouraging future. With increasing institutional support, appealing valuations, and initiatives to boost market participation, Greece's stock market could be in a strong growth position.
Disclaimer: The content of this post represents an opinion and is for informational purposes only. It is not financial advice. Please seek a duly licensed investment professional for that.
🙌 PROOF THAT GREECE IS CHANGING
Greece is finally taking the space domain seriously. Seven consortium groups spanning a total of 25 agencies, Greek universities, research groups, SMBs and tech startups have been chosen by the European Space Agency (ESA), in close collaboration with the Greek Ministry of Digital Governance, to run CubeSat missions.
The seven Greek CubeSat missions have completed the phase of mission planning and are now moving ahead towards the construction of nanosatellites. The program was financed with €15.7M from the EU Recovery and Resilience Facility (RRF).
According to a statement by the ESA: “The CubeSat projects represent the first part of ESA’s Greek Connect Programme, which will include a dedicated satellite system providing secure connectivity for Greek national services, the set up of a state-of-the-art assembly integration and testing facility, and upgrades of existing optical ground and radio-frequency tracking stations in Greece.”
This is a very important initiative for Greece. Yes, the funding alloted is miniscule. And yes, Greece is belatedly entering a domain that has seen enormous innovation in recent years, billions in investment and a new global space race (now joined by the private sector too). But you know what they say? Better late than never.
My take: the Greek state needs to aggressively lobby for more EU funding and support local researchers to receive larger grants from other international bodies. Greek entrepreneurs should also think of solutions out of the box, especially at a time when space is so heavily contested and space debris is becoming a big problem.
🏆 CELEBRATING GREEK WINS
Greenhouse gas emissions in Greece fall 45% since 2005. According to the International Energy Agency (IEA), Greece has almost halved the total amount of its greenhouse gas emissions in just 15 years, with further reductions planned ahead.
Two legendary Greek scientists win the John von Neumann Theory Prize. Christos Papadimitriou and Mihalis Yannakakis, both Professors at Columbia University, have received the prestigious award for their research in computational complexity theory.
Greek researchers co-develop “microscope for time”. The camera created by Prof. Kyros Kutulakos, postdoc researcher Sotiris Nousias and their team at UoT captures videos that can be replayed at the speed of hundreds of billions of frames per second.
10 young Greeks propose revolutionary Parkinson’s test kit, win Gold medal. A group of students (all < 25 y.o.) have mocked up a test that can detect Parkinson’s Disease a decade before symptoms start. They now want to productize the idea.
Greece is a global champion in debt reduction. While the total national debt is still high, the debt-to-GDP ratio has been falling fast over the past few years, a trend expected to continue. More favorable public debt profile = more sustainable growth.
Ioannina becomes top destination for remote work. Digital migrants from all over the world and “Gianniotes” expats are moving to the beloved Greek city, which is gradually turning into a remote work tech hub with a growing co-working community.
👩🍳 A TASTE OF GREECE ABROAD
A list of fantastic Greek restaurants that have recently opened across the world:
étsi - l'ouzeri (Paris 🇫🇷). Baby sister of successful étsi - le bistro, the latest creation of chef Mikaela Liaroutsos is a perfectly unique combo of Greek-French food.
Deligreco (Copenhagen 🇩🇰). Modern Greek comfort food for the cold Scandinavian winter. Theodoros Tsigkas is making the Danes fall in love with top Greek flavours.
Bar Vlaha (Boston 🇺🇸). The story of the Vlachs told through tasty Greek food. The latest project of serial restaurateur Dimitris Tsolakis is definitely worth a visit.
1905 (London 🇬🇧). Could the soul of top Cretan food ever be found at the heart of London? The new project of Nikos Nifoudis aspires to make this dream a reality.
🤯 DID YOU KNOW…
There is a Museum of Asian Art in the Greek island of Corfu. Founded in 1928 thanks to the donation of Gregorios Manos’ Sino-Japanese collection, it currently boasts 15.000+ works of Asian art from private collections and individual donations.
Until next time!
P.S. If you’ve read so far, here is the inspiration for today’s title.
 | A guest post by
|
Love seeing the recovery put in more concrete economic terms like this.