Leaving a cycle of memoranda and entering a cycle of investments

Both the Greek stock market and many European ones are affected by multiple factors. The Greek Stock Exchange is not isolated although the economy experienced a long isolation period. It operates within a geographical area where there are important political and economic developments that can only influence it (Turkey, Italy, etc.).

“In this difficult climate for the European markets, one can discover well hidden ‘diamonds’ which can bring profit and encourage investments,” a Greek analyst said to the Athens-Macedonian News Agency (ANA).

“Greece may offer few investment opportunities at this stage, but it is estimated that the situation can change and bring significant profit to domestic and international investors in area,” he added.

This is probably the reason why credit rating agencies have recently upgraded Greece. Fitch Ratings upgraded the long-term foreign currency issuer default rating on Greece to ‘BB-‘ from ‘B’ on August 10, three notches from investment grade.

Standard and Poor’s ratings agency has also upgraded Greeceā€™s’ credit rating by one notch, from ‘B’ to ‘B+’, citing reduced debt servicing risks. Moody’s estimates are expected on September 21.

At the same time, Moody’s estimates that the Italian economy may be downgraded, increasing interest rates.

Greek bonds, however, fall. Unlike the stock market, bonds remain a higher security index. Greece’s 10-year bond fell yesterday by 10 basis points and stood at 4.24 pct from a 4.34 pct point, which expresses optimism and expectation. Today, they actually opened at 4.23 pct.

The 5-year bond was six basis points lower at 3.22 pct. “Maybe these developments are another, more optimistic, view of how the markets saw the Prime Minister’s speech after the exit from the memoranda,” the analyst pointed out, adding: “Markets want to see growth prospect. Does Greece have such a prospect? If so, then it can be considered an investment opportunity. If not, it will have to wait for its turn.”

“What some may consider promises, others may see it as a development plan”, stock market officials explained.

In the first day of the post-memorandum era, responsibilities are not only state ones, they are also private. We should all change our way of thinking in order to become less defensive and rather more aggressive to prevent the liquidity in Europe, the same officials said.

“It is obvious that the country must take a step forward, exiting a vicious circle of investment introversion that has hurt the economy for a decade,” banking officials told ANA.