Major foreign and domestic investors hoping for fresh inflows of capital on the Greek stock market are unlikely to see that materialize until the second half of this year and even then it will depend on certain conditions being met.
Despite the Athens Exchange’s rebound from mid-February lows, prevailing concerns regarding the Greek market have prevented the entry of new funds. The MSCI index for Greece still shows the worst performance across the world since the start of the year.
“After the recapitalization of banks and certain major portfolio restructurings due to changes in international indexes that led some capital mainly toward Greek bank stocks, the Greek market is only seeing activity from short-term traders,” Evangelos Haratsis, chief executive of Beta Securities, tells Kathimerini. Haratsis added, however, that he expects the situation to improve once the bailout review by creditors is successfully completed, provided this happens soon, as the delay in wrapping up talks has inflicted considerable damage on investor sentiment.
“What investors seek in Greece is very simple,” says Athanasios Vamvakidis, managing director and head of European G10 Foreign Exchange Strategy for Bank of America Merrill Lynch Global Research: “They are looking for reforms to be implemented, the bailout program’s targets to be met and an end to concerns regarding political stability.
“As long as the implementation of reforms remains problematic and fears linger that elections are around the corner, the only investors to invest in Greece will be the short-term traders. Sustainable growth requires long-term investors to come after the short-term ones,” notes Vamvakidis.
He goes on to add that it would be “a tragedy” if Greece’s misses out on the opportunity to be included in the European Central Bank’s quantitative easing program this year