The General Index may have returned above 1,450 points for the first time since the end of September, but the question is whether the Athens Stock Exchange will manage to recover the “peaks” of 1,502 points by the end of 2024, in order to ideally close the current year.
The remaining sessions may not be many in number (12 until Christmas and 15 until New Year), but short-term psychology leaves all scenarios open. The Santa-Claus or year-end rally is a long-tradition, which helps traders improve the returns of their portfolios. However, the turnover of the last sessions of the year usually drops to levels significantly below 100 million euros – a rather discouraging development for the effort to achieve a new record.
Climate Change
In any case, most indications, despite the geopolitical (and not only) challenges abroad, are on the side of buyers. The game changer, as demonstrated throughout the past week, is the “awakening” of banks, as the official refutation of the scenarios regarding extraordinary taxation has unleashed significant forces, which have not only led to a recovery from the recent low levels, but have also bridged most of the distance from this year’s “peaks”. And as always, when banks rise, the rest of the market automatically rises too.
“The question is whether the upward movement that began with JP Morgan recommending an overweight rating for Greek stocks will last, creating the conditions for a year-end rally that will aim to challenge the 1,500-point area,” emphasized Dimitris Tzanas of Kyklos Stock Exchange, adding that this is an undertaking that will require maintaining positive investment psychology with the participation of domestic investors. The recovery of total capitalization to levels above 100 billion euros, as well as the achievement of double-digit gains (+12.6%) are indicative signs of improved psychology, which continues to be unaffected by global factors.
Besides, despite the recent rise, it is known that the valuations of listed companies remain attractive, enjoying a significant discount compared to similar companies in Europe – let alone in the US.
A significant rally
“The structural bull market of the ATHEX remains strong. The impressive profitability is the ‘fuel’ that essentially maintains the fundamental optimism for several listed companies, while this year’s and multi-year high of 1,502 points is not far away,” analyst Petros Steriotis explained.
At the moment, the Greek market is called upon to cover approximately 50 points or 3.2% in order to reach the goal.
Valuations may be attractive, dividends may be satisfactory (around or even higher than 4 billion euros) and returns may prove generous, but the absence of dynamic domestic investors is an inherent problem that needs to be addressed in order to change the level. At the same time, the sensitivity of Greek stocks to negative events from abroad should always be taken into account.
New York appointment
The week begins with another big “appointment” for listed companies, as the 26th annual Capital Link is taking place on Monday in New York. At least 21 listed companies are “present”, including top Greek companies, in an effort to attract “fresh” and higher-quality capital in anticipation of the transition process from Emerging to Developed Markets.