Greek stocks and bond market have increased last month, fueled by debt relief talks, which moved to an optimistic level. Many analysts are expecting the Green market to go further in the green, however, an optimal time to cash in was recommended by JP Morgan.
Executive Director and Senior Global Equity Strategist of JP Morgan Emmanuel Cau said, “while an agreement on debt relief is likely, the economic reality will soon rein in the exuberance that lifted the ASE Index 42 percent in three months”, according to a source.
Meanwhile, two Europeans titans HSBC Holdings Plc and Credit Suisse Group AG reaffirmed a bullish call in Greece and aim for assistance talks. On the other hand, JP Morgan Chase & Co backs on a resistance on the rallying Greek stock market.
Morgan Stanley expects the Greek stocks to increase by about 90% than the current levels, if a debt relief deal will be reached. The bank affirmed a note stating that Greek banks like National Bank of Greece SA, including Alpha Bank AE, Piraeus Bank SA, and Eurobank Ergasias SA have recently trimmed down costs, while inflows kicked off sluggishly. The note entails an upgraded rating on the said banks.
The co-founder of Seven Investment Management Justin Urquhart Stewart recommends that the increasing stock remained losing its steam, according to a source. Moreover, Mr. Stewart issued an overweight rating on the Greek stocks last year.
Greece’s revival talks seemed to never end until the recent developments started to kick off. Ahead of the Monday meeting with the finance ministers in euro-area, the equity benchmark ASE index rallied by about 3%.
Furthermore, Greek bonds were seen reaching about 3.8% of return for this year, than a 2.9% return on average return on the sovereign securities of the euro-area, according to a source.
The ASE index has nearly recovered from losses for the year. The finance ministers have considered talks in order to find support from the International Monetary Fund for the Greek debt, as the talks are scheduled to resume once again in two weeks time.
As part of the history of the Greek economy, the country has struggled during a recession for the last six years. There has been a 25% unemployment rate last year, and public support has sent 19 European countries to weaken.
Subsequently, the former Prime Minister Antonis Samaras called for a Presidential election at the end of 2014. Since then, vote outs that have been cast recording in three, but the capital controls still won its position and the stock exchange was shut for over a month.
The equities declined by over 23% and 30% until February for this year. Thus, it has sent the Greek equity markets the biggest loser before a market rally amongst the 93 markets, according to a source.
Seeing the banking sector alone, it is anticipated that bank stocks were given a fair share in a volatile market. Research firms are expecting that the Monday meeting will turn out positive, however, there are no details that have been yet disclosed. The most closely watched is how the European countries came in terms of the Greece’s settlement.
Concerns started raising fueled by the uncertainties towards the banking sector in the country, which currently faces a potential instability. The financial sector has witnessed numerous capital control implementations. However, many still believe that the country will remain steady before investors’ sentiments were fully restored.