JP Morgan has placed Alpha Bank’s share on the list of the top 10 shares of Central and Eastern Europe, Middle East and Africa (CEEMEA) region, the first Greek share to enter the list since 2014, as highlighted in its new report bank.
It is also reported that Greece is JP Morgan‘s preferred market from the emerging markets of Europe for 2023, where it decided for the first time after five years to change its attitude to positive , mainly due to the growth “weapons” the Greek economy has.
Scenarios
As JP Morgan notes, with 2023 forecast to be a difficult year for the global economy and especially for the CEEMEA region, at least in the first half, Greece is showing a more predictable macroeconomic background, with increasing profitability in the banking sector.
The bank estimates that under its positive scenario the MSCI index of Greece will rise by 15% next year, while according to its basic scenario the rise will be around 8%.
The positive scenario for the index is supported by Greece being less impacted by high gas prices than in other EU countries, growth prospects for 2023 looking strong as EU funds flow in, clearing of banks’ balance sheets is largely complete and investors’ positions are still limited.
The dangers
Among risks is the small size of the Greek market, which makes it vulnerable, as well as the long-term growth dynamics.
For Alpha Bank
As for Alpha Bank, JP Morgan points out that its balance sheet cleanup is undervalued by emerging market investors and cheaper than most EU banks, while it has strong medium-term upside given the private sector with low leverage.
For the Greek market
As for the Greek stock market, the bank admits that it has not been involved much and adds that it was and still is a small part of the whole, weighing 2.1% in the MSCI EMEA index and 0.30% in the MSCI Emerging Markets. It reviewed its last extensive report on Greece which was in 2017.
“We considered it a high-risk market where we didn’t have a strong view. Now, we have some stronger views: the process of repairing the banks’ balance sheets has been successfully completed, finally, and the macroeconomic background is both positive and more resilient to the European recession than most countries in the Central European region,” it says.
The recovery is clear
In macroeconomic terms, in the 2010s per capita income in Greece had fallen by 28% (from its peak in 2007 in real terms to its 2020 low in the COVID-19 period) and is still 18% lower.
But Greece’s recovery path, as JP Morgan points out, looks clearer and more certain with the Recovery Fund in the background. In addition, Greece-EU relations have improved significantly under the New Democracy government after the 2019 elections. Greece has managed to secure a good share of the EU (NGEU) funds that will help the next leg of development.
“We agree with the IMF’s assessment that the reforms supported and financed by the NGEU are vital to pushing structural growth higher,” JP Morgan notes. The government’s recovery and resilience plan has already disbursed €1.8 billion (about 1% of GDP) with another €8 billion in projects in earlier stages. In total, the government plans to spend 32 billion euros in 2021-2026″, it is reported.
Finally, JP Morgan sees opportunities for Greek banks in the low corporate debt of the non-financial sector and in household debt.
Latest News
Developing the Blue Carbon Economy in Greece
Can Greece make money by protecting its marine environment?
EIB Appoints Greece’s Ioannis Tsakiris as New VP
Ioannis Tsakiris started the new role May 1 after spending 15 years at the European Investment Fund (EIF) and serving as Greece’s Deputy Minister for Development and Investments
Two Greek Beaches in Top 50 in the World
Both Greek beaches were on the list of the best beaches in Europe too
Eurostat: Greece 20th out of 26 European States in Hourly Average Wage
According to figures released by Eurostat, the Benelux Grand Duchy of Luxembourg, one of Europe’s hubs for finance, is in first place
Greek Property Renovation Surge amid Economic Constraints
This has led to a notable escalation in renovation costs, with average prices per square meter exceeding previous norms and reaching even 1,000 euros in premium locations
RRF: Additional €5.1bln Funds for Subsidies to Greece in 2025
By April 22, funds totaling 5.75 billion euros had been transferred for approved projects of the Recovery Fund to entities within and outside the general government and final recipients
OECD: Greek Economy Resilient with 2% Growth Forecast for 2024
However, the OECD highlights challenges including the need to enhance productivity and fiscal adjustment due to high debt levels.
Challenges and Delays in Greece’s Hydrocarbon Exploration
Sources disclose that the petroleum companies holding the concessions are seeking partners to jointly invest and share the costs of exploration and drilling.
Greek Beach Visitors Can Report Violations on New ‘MyCoast’ App
Greek authorities hope the newly-launched, free ‘MyCoast’ app will help clamp down on public beach violations
BoG Figures Confirm Banner Year for Greek Tourism in 2023
20.6 billion euros in related revenues topped the previous year’s figure by 16.5%