The strong demand of foreign capital for Greek assets, the reactivation after the 10-year debt crisis of leading “investment houses” such as Capital Group, Fidelity, BlackRock, Lazard, Wellington, Pictet, etc., the positive investment story of Greece which is supported the business-friendly environment alongside the outperformance of the economy, the clear political horizon, attractive valuations and the imminent start of the procedures for the upgrade from developing to developed market support the upward movement of the Athens Stock Exchange which remains in the lists of markets with the top yields worldwide.
Yields
It is typical that after a 39.08% gain in 2023, a year in which Greek shares earned 22 billion euros, marking the 3rd best performance worldwide, also a consequence of the country’s recovery of the investment grade, and the first period of 2024, with profits of approximately 8.5% (+17% banks) and an increase in the market value of the shares by 9.5 billion euros, of which 2.5 billion euros (today it moves to 2.8 billion euros) concerned the capitalization of “El. Venizelos”, the domestic stock market is ranked 4th in terms of performance (in local currency) worldwide, but behind inflationary markets (as in 2023) of Turkey and Egypt. Also based on the Morgan Stanley Capital International (MSCI) indices, expressed in US dollars, it ranks 4th again for this year behind the markets of Zimbabwe, Turkey and Bulgaria among all developed, emerging and nascent emerging markets.
The strong demand from foreign investors is reflected in the degree of overcoverage of government and corporate bond issues, in the availability of shares to investors (placements), but also in new introductions (IPOs) which led to placements and “fresh” money, as was also seen by overcoverage of the landmark introduction of “El. Venizelos”. For the CEO of HEXA G. Kontopoulos, this is an introduction (the largest of the last 18 years) of key importance, which at the same time sends an emphatic message about the investment dynamics of our country.
The banks
In less than a month this year, the four systemic banks also “raised” capital of 1.8 billion euros from the markets (2.8 billion euros if both issues are added at the end of 2023), with their bond issues to mark a record overcoverage, a result of the high demand observed by international funds for Greek securities, which also helped in the de-escalation of interest rates. Investment interest will shift in the medium term to the new offers of ownership shares of TAIPED in Piraeus and Ethniki, as well as to the new introductions of real estate companies such as Noval Property of the Viohalco group, Intracom Properties due to the merger with KLM, but also Lamda Malls, of a new subsidiary of Lamda Development.
While the big bet of the market this year concerns the upcoming start (from the middle of the year through inclusion in the “under watch” list) of the upgrade process of the AXA to a developed market (probably in 2025) which will reduce the risk premium of Greek shares as well , the estimates indicate that in 2024 the Athens stock exchange can record another good year.
For NBG Securities, Greece is back on investors’ radar, while in the event that no new significant external negative shock takes place, it “sees” the General Index at the end of the year above 1,500 points, against a target price of 1,550 units from Goldman Sachs and 15%-25% upside margins that Alpha Finance “sees” for Greek shares. It should be noted that the capitalization of the Greek stock market is around 40% of GDP in 2024 compared to 80% of the average in the eurozone, indicating the potential margins for the market to rise, while according to the calculations of NBG Securities, Greek stocks in the entire market is trading at an average enterprise value to earnings before interest, taxes, depreciation and amortization (EV/EBITDA) ratio of 5.7 times for 2024, i.e. at a discount of more than 50% compared to the EU market average .
For Global X, a company that operates in the field of ETFs (Tradable Mutual Funds – ETF), having the ETF, Global X MSCI Greece ETF (GREK) that invests in the domestic market, the Greek stock market is characterized as a value opportunity market (Value Opportunity), considering that the Greek shares still show large margins of growth, since the investment story of Greece continues to be valid.
The commitment
Indeed, in a recent meeting that Global X executives had with the Minister of National Economy and Finance, Kostis Hatzidakis, the latter reiterated his commitment to accelerate reforms while maintaining a pro-business environment. The aim is to make the Greek economy stronger and more productive through a balanced mix of fiscal prudence and a business-friendly approach. Strong growth, a large reduction in public debt to GDP, shrinking unemployment, a rise in foreign direct investment and an effort to improve the investment gap created during the debt crisis, limited political risk and capital inflows both through the Recovery Fund and in private enterprise, pave the way for a decade of potential growth and opportunity.
The top picks for Greek stocks
NBG Securities’ top stock picks for 2024 are Mytilineos with a target price of €50, Piraeus with a target price of €4.50 and Titan with a target price of €26.50, while Alpha Finance picks respectively the securities of Piraeus, Eurobank, Mytileneos, PPC, HEXA and Titan. Piraeus Securities also gives target prices of 2.6 euros for Alpha Bank, 8.80 euros for National Bank and 2.6 euros for Eurobank, while the list of top picks also includes the shares of PPC ( target price 18.50 euros), GEK TERNA (22.20 euros), Jumbo (32.80 euros) and Titan (27 euros).
It also maintains the “outperform” recommendation for the shares of Mytileneos (target price 44.50 euros), Motor Oil (33 euros) and OPAP (18 euros), ADMIE (3 euros), Aegean Airlines (16.5 euros), Cenergy Holdings (9.25 euros), Fourlis (5.80 euros), HelleniQ Energy (9.50 euros), Sarantis (10 euros) and Terna Energy (20 euros).
Optima Bank maintains Piraeus (target price 5 euros), Eurobank (2.41 euros), PPC (17.4 euros), Aegean Airlines (14.7 euros) and Mytilineos (47 euros) as top picks, while Euroxx AEPEY gives, among other things, target prices of 36 euros for Titan and 19 euros for Autohellas. JP Morgan maintains an “increase positions” recommendation for the banks with target prices of 2.40 euros for Alpha Bank, 2.40 euros for Eurobank, 8.30 euros for National Bank and 5 euros for Piraeus .
#Athens #Stock #Exchange #return #foreigners
