Jefferies – Why it’s upgrading the Greek stock market to bullish

The American agency Jefferies upgraded the Athens Stock Exchange to bullish, while it sees positive prospects for the Greek economy.

In today’s report, Jefferies upgrades its stance on the Greek market from moderate bullish to absolutely bullish and talks about economic growth rates of about 8% for 2021, ie significantly higher than expected.

The Greek stock market

For the Greek stock market, Jefferies states that this is a market full of companies that operate in areas with major barriers to the entry of new players.

The basket of Greek shares created by the house a decade ago offers excellent value and shows no connection with the course of international markets, analysts note.

This basket consists of HELEX, OTE, Jumbo and Motor Oil. At the same time, from the Greek companies that are listed abroad, Jefferies covers Capital Product, Coca Cola HBC, Danaos Corp, Gaslog Patners, Star Bulk Carrier, Stealthgas Inc and Tsakos Energy NA.

Jefferies has noted many times in the past that the Athens Stock Exchange is full of companies that have the advantage of operating in the market with high entry barriers.

As concerns the economy

According to the American agency, after a period of deflation in 2020, the inflation of Greece (October 3.4%) is moving in the positive direction.

The really good news is that the youth unemployment rate has returned below 25% and is heading down to 2008 rates, while Greece has made significant reforms during the pandemic, and all this explains and pushes the upgrade of the attitude towards the Greek shares to bullish.

For 2022, convergent estimates put growth at 4%, but the IMF “sees” it at 5.4%, notes Jefferies. He adds that the Greek economy is one of the most exposed to tourism (at 19% of GDP in 2019).

In addition, the disbursement of Recovery Fund funds is expected to help offset the 3% “scarring” of economic output estimated to be leaving the pandemic.

Greece has implemented significant reforms in the pandemic, analysts add.