The rally at the Athens Stock Exchange (ATHEX) which began at the end of 2021 reached a peak earlier this week when the index climbed to levels unseen since 2014.
The last time the main index stood above 950 points was in December 2014.
Earlier in January, an HSBC report recommended the purchase of Greek bank stocks, seeing great potential for cash flow in the local market. Cash duly flowed into the bourse, with turnover continuing to rise.
Although the market’s benchmark dropped 15 points on Friday heavily affected by the decline in the New York Stock Exchange on Thursday and those in the rest of the eurozone on Friday, with the chances of a war in Ukraine increasing anew, the rise in the last month is seen as spectacular.
Athens Stock Exchange gained 5.50% since January 1
The new capital inflows are focused on the banking sector, with the banking index gaining 13.69% since the beginning of 2022, almost as much as the gains for the whole of 2021.
The General Price Index since the beginning of the year gained 5.50%, the index of high capitalization records gained 5.99%, while the index of medium capitalization strengthened by 4.27%. The total market capitalization since the beginning of 2022 is increased by 3.5 billion euros ($4 billion).
The best performing shares since the beginning of 2022 are of Alpha Bank (+ 18.85%), Jumbo (+ 14.01%), Aegean Airlines (+ 13.84%), Piraeus (+12.405), Eurobank (+ 11.51%), Ethniki (+ 10.37%), Titan (+ 9.27%), Motor Oil (+ 8.95%), ELPE (+ 7.72%), IPTO (+6, 83%), Elvalhalcor (+ 5.95%), Viohalco (+ 5.88%) and Lamda Development (+ 4.27%).
Reasons for the rally
Analysts say that the rally at the Athens Stock Exchange is due to several factors:
- At a time when the world is preparing for a “big tightening” of monetary policy, Greece is about to embark on a new multi-year growth cycle, with an avalanche of EU capital inflows which will reach 82 billion euros ($93 billion) by 2027.
- Analysts expect that it is very likely Greece will achieve the BB + rating in 2022, from at least one of the four major rating agencies, which is one step away from the investment grade.
- Greek banks are now returning to normal, with the Non-Performing Exposures index expected to fall to 5% next year for the industry as a whole.
The rally at the Athens Stock Exchange follows a series of positive forecasts by international organizations for the Greek economy.
The European Commission, for example, has forecast strong growth rates of 7.1 percent in 2021 and 5.2 percent in 2022 for Greece in its autumn economic forecasts, published in November.
The EU’s executive revised its forecasts for 2021 upwards compared to those published in July (4.3 percent) and slightly downwards for 2022 (from 6 percent).