June 21, 2024

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Political risks affect the Athens Stock Exchange

Political risks affect the Athens Stock Exchange

And officially enter the country for a long time pre-election periodwhich will apparently end in July, with The second election. We have three months ahead. A whole quarter, and maybe more, if we consider that it will take a few days before the new government takes over.

This time is measured in a different way by Community A real different way Economy. And he measures it in a completely different way Investment and stock market ecosystem. And he over time calculates the cost of money, especially today when we are in a high interest rate environment. Which calculates cash flows, amortization premiums, turnover, contracts and agreements. Which calculates changes in investment psychology and in the emotional and mental stress of investors. Because the investment community and especially the stock market community is particularly sensitive to volatile external factors. Elections are one of these features fickle factor.

The 2023 election is more important in terms of the stock market than the 2019 election. The 2019 election was butter on the bread for investors. All negatives are left behind. The markets expected only positive news. Which is why, as we all remember, o General index to Athens Stock Exchange They underestimated the victory of New Democracy and the adoption of a pro-investment policy, already at the beginning of 2019. Investors viewed the 2019 elections as a springboard for economic and stock market successes. As an opportunity to return investment to normal and return to the basics of economic freedom necessary to bring about a boom in values ​​and valuations.

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From 2019 onwards, what we’ve seen happen in… Athens Stock Exchange; We have witnessed the complete consolidation of the banking sector. We saw her rescue ppcThis allowed it to transform from an energy pariah into a major player in the Balkans. Our opinion continues upgrades from rating agencies Both the economy and listed companies. We’ve seen lower corporate tax rates, lower and higher taxes on dividends profitability of listed companies at historic heights.

We saw greek companies involved in MSCI index To become ten, from three in 2019. We saw Greek and Greek stocks bonds To re-enter the international investment map. We’ve seen dozens of overseas institutional investors investing in Greek stocks and strategic investors taking strong equity positions in banking, energy and construction. We saw great investment capital And private equity fundsto acquire companies.

Investors so far satisfied with the performance of the real Economy.the rapid The increase in the domestic product At rates faster than the rest of European countries, their steady decline The unemployment, from the proceeds of shares on the Athens Stock Exchange, but also from the management of large strategic investments such as shipyards. But as the three-month countdown to the July election begins, investors are jittery.

Their main fear is that the government that will emerge after the electoral process will not follow the same economic policy as the current government. How to break the favorable investment mood. Something that will have a negative impact on the real economy, on investment activity, and thus on the financial performance of companies listed on the Athens Stock Exchange.

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Because a self-sufficient government can be established New Republic by a majority of 2-3 deputies. Because the government can be established New Democracy – PASOK, which will withdraw the burdens and positions of the Basuk state. And because a government can be formed on the basis of I was whistling and his fellow travelers, various opposing actors who live in a parallel universe. Therefore, the danger of a government with weak balances or even worse of a government that will be the product of a metamorphosis is obvious.

Because the investor’s mind immediately goes to waste, the daily stock market calendar raises major questions.

There is a risk that the Greek economy will not upgrade and will not acquire it investment grade; Yes, there is, because rating agencies, among others, will also assess political risks.

There is a risk of that Borrowing cost Greek state? Yes there is, if debt buyers see signs of a departure from the established economic policies.

There is danger Re-nationalization of the PPC; No, there is not, unless a government is elected that wants to clash with the European gains.

There is a risk that being nationalised the Two of the four regular banks; We do not think so, because any such attempt would lead Greece into conflict with the international investment community.

There is danger Increase taxes on corporate profits and dividends; Yes, there is, because diversification of sources of tax revenue can be chosen in the context of populist economic policy.

There is a risk that stopping capital inflows By foreign buyers on the Athens Stock Exchange? Yes, because foreign investors, especially in times of economic and political risks, take a wait-and-see attitude until the picture becomes clearer. And if, after clarification, it appears that investments in the Athens Stock Exchange are not profitable based on the “risk to reward” indicator, they may choose to liquidate the investment.

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Until the July 2 elections, we will have plenty of time to monitor and analyze the economic landscape and the stock market. I ended the day’s note, with the classic “kalo kuragio,” said by Oli and Ren. Because it is certain that investors in the Athens Stock Exchange will need courage and a strong stomach, until the next government is sworn in through elections.