HSBC and Goldman Sachs are positive on the course of the Greek economy and the country’s stock market, with both recommending investors position themselves in the country’s financial market.
More specifically, HSBC maintains its “overweight” recommendation for Greek stocks, proposing a higher weighting in the FTSE Russell Emerging Markets Index – an international equity index tracking stocks from emerging markets worldwide – to 1.3% from the current 0.7% based on benchmark indices.
The London-based bank estimates that the Greek economy has shifted its reliance more on exports and investments while remaining the largest beneficiary of funding from the Recovery Fund (about 17% of GDP for the period 2021-2026).
Greek stocks are estimated to trade at 7.3 times 2024 earnings and 7.2 times 2025 earnings, compared to 12.6 and 11.1 times for stocks in the FTSE All World Emerging Markets Index, with the average dividend yield estimated at 5.6% compared to 3.2%, respectively.
On its part, Goldman Sachs estimates the Greek economy is set to solidify its growth momentum, with industrial production accelerating after the end of the pandemic and now standing just 10% below pre-debt crisis highs.
Investments could increase at a double rate compared to the eurozone during the 2024-2025 period if the absorption capacity of the Recovery Fund reaches a reasonable 80%. Overall, the positive prospects of the Greek economy could also mitigate the negative impact of demographic deterioration.
Athens Stock Exchange
The trajectory of investments could also lead to the upgrade of the Athens Stock Exchange (ATHEX), which in June 2013, in the aftermath of the debt crisis, was downgraded to an emerging market status. As a result of investment resilience, there is a strong possibility of its upgrade to a developed market, possibly by the end of the summer.
