Where his investors Athens Stock Exchange had begun to be troubled by the presence of external factors (Political risk, the Middle East and the Athens Stock Exchange | Liberal.gr) and the price of the General Index reached its lowest point in the last two months, the Buy performed her miracle once more.
Instead of breaking below the level of around 1,360 points and triggering fresh liquidations, the General Index achieved five consecutive up sessions and comfortably surpassed the 1,437.65 points that was the high of early March.
After at least four failed attempts to break the 1,425-1,437 level in the past two months, Tuesday’s session close at 1,447.82 took the General Index to its highest point since May 2011 and paved the way for the start of the next part of the upward trend that has started in the last two years. The positive trend continued during yesterday’s session, the sixth consecutive upward trend.
But let’s not rush. It is correct to say that he “may have opened” the way, as it will be a few days before we can say with relative certainty that we are starting to look towards 1,500 units, an area that many market analysts believe is his next target General Index.
But before we move on to the future, it is worth taking a look at the last few days and trying to interpret the sudden change of scenery for the better. What happened in the last seven days that might have improved investor sentiment? Things certainly calmed down a bit in the Middle East, where the attitude of Iran and Israel gave the international markets the impression that both sides do not wish for the escalation of the confrontation between them.
The drop in the price of fuel on the international markets, as well as the relatively negative course of gold and silver, probably confirm this assessment, as well as the improvement of the climate on the international stock markets. But that was not the only thing that helped our market.
The decision of the rating agency, unexpected by the markets S&P Global to keep Greece’s credit rating stable but raise the outlook from “neutral” to “positive” is sure to have made many investors turn their heads to the Athens Stock Exchange. Some announcements about the country’s economic performance also helped, such as the one about the primary surplus of the state budget in 2023, which finally stood at 1.9% of GDP instead of 1.1% which was the official forecast.
The above factors made them investors to recall again the very optimistic reports of a number of domestic and international stock analysts, who have set price targets much higher than current prices for the shares of many of the key companies listed on the Athens Stock Exchange. Added to all this was the very high demand for the 30-year bond issued yesterday by the Greek State, with the issue being covered dozens of times and the interest rate being set at a clearly lower level than expected.
But can we be sure that yesterday’s upward split will soon bring the General Index of the Athens Stock Exchange to 1,500 units, as many analysts estimate is very likely to happen? Obviously we cannot, we can never be sure of how the stock market indices will move. The truth is that the way the upward split was done was very convincing and left no doubt about the strength of the market.
This is not enough, however, the real “test” in such cases is how investors react to the first small “retraction” of the market after the upward split. If in the next few days the General Index returns to the area of 1,425 – 1,437 units without falling below it, we will have an even stronger positive indication for the continuation. In order to do this, however, certain conditions must be met.
Obviously, we should not have geopolitical developments that will bring fear back to investors. Beyond that, and given the strong fundamentals and good prospects of the majority of the most important listed companies and the confidence of investors in the economic policy followed, two things can help the shares of the Greek stock market.
The first has to do with the fact that from today the period of publication of the financial results of listed companies for the first quarter of 2024 begins, with Mytilineos being the first in line (we do not forget that many companies have not yet published their results for in 2023 but few of them are going to affect the overall climate in the Athens Stock Exchange).
In the next twenty days we will hear the news of many important companies and the market will be able to get a good picture of how the year started and how the managements of the companies estimate how things will develop for the rest of 2024.
Here we must point out that despite the fact that we are talking about a twenty-day period, we are actually referring to much fewer stock market meetings since the Easter holidays are approaching, which this year also coincides with May Day. During this time we will hear news from all the banks, which continue to attract a lot of investment interest, and it is not at all impossible to hear estimates that are more positive than what the market expects to hear.
If the trend that we have become somewhat accustomed to over the past few quarters continues and the guidance of company managements regarding their future course proves to be superior to the estimates of analysts and investors, it is very likely that we will see a strong investment wind blowing in the Greek stock market.
The second one that will play a role in the course of the market in the next period is not so much of an investment and business nature but of a political nature. We are of course referring to the elections for European Parliamentwhich are now about 45 days away.
As we know very well, political uncertainty is one of the main enemies of the stock markets and we are almost certain that the significant increase in political tension in the country also played a role in the difficulty of our stock market to continue its upward trend in recent weeks. The more smoothly this pre-election period progresses until June 9, the better the investors in the Athens Stock Exchange will feel.
Already, in the last few days there is a feeling that the political situation has calmed down a bit and this is quite likely to have played a small role in the upward stock movement as well.
At the same time, some recent public opinion polls ahead of the European elections do not point to an election result that could create the impression of a return of political risk. Of course, no one can be sure about the political developments of the coming weeks, many times things change suddenly.
However, if a new significant increase in internal political tension is avoided and the polls that will take place in the next period do not differ significantly from those of the last few days, then we can say that the headwind for the Athens Stock Exchange will become stronger. Of course, since the European elections are not only taking place in Greece, we are keeping our reservations about the reaction of our stock market in the event that their results throughout Europe create a general concern.
However, until the European elections take place, and under the conditions we mentioned before, it seems that the Athens Stock Exchange probably manages to overcome the doubts that had dominated it for a few weeks and will try to set a bow for its next upward destination. Exactly who it will be is of little importance.
