Last session of the week, historic for the Greek stock market as it moves into the developed markets category.
Veteran figures of Sofokleous 10 speak of the mega rebalancing of many recent years, assigning the weight that befits today's session. At its “close,” the restructuring of the FTSE/Russell and STOXX indices constitutes the first step for entry into the “big category,” with the next steps to be attempted as early as Monday, with a view toward the milestone of the upgrade by Moody's in May 2027.
By the general assessment of members of the community, today's is perhaps the most important session since the 2012-2013 period, when the Athens Stock Exchange was being successively downgraded by foreign houses, even reaching the point where the benchmark index for “international funds,” the MSCI Greece Standard, consisted of just three stocks. Since then, time has passed, the stock market is returning, as is the Greek economy, though it still has a long way to go.
However, it is now at the turning point, with whatever that may mean, initially in the short term and later in the medium/long term. In this context, the rebalancing will take place with Wall Street in a long mode, a fact that will probably facilitate the moves of long intraday/trading players. We have been referring since the beginning of the week to brokers' estimates for turnover unprecedented by Greek standards, conveying their forecasts of 6 and even 7 billion euros.
The “new era” of Euronext Athens will now include nine constituents in STOXX and 62 in FTSE/Russell. Specifically: National Bank, Eurobank, Piraeus Bank, Alpha Bank, GEK TERNA, Jumbo, Motor Oil, PPC and Metlen Energy & Metals are joining the Europe 600 STOXX.
At the same time, there are the flows from the changes in the FTSE All World indices. The stocks are being upgraded to Developed Market status from Monday. The FTSE Mid Cap category will include: Alpha Bank, Eurobank, National, Piraeus, Allwyn, Cenergy, GEK TERNA, OTE, PPC and Viohalco.
Another 22 stocks will enter the Small Cap category, specifically: Aegean, Aktor, IAA, EYDAP, Autohellas, AVAX, Ballys Intralot, Bank of Cyprus, CrediaBank, Ellaktor, ElvalHalcor, Euronext Athens, HelleniQ Energy, Ideal Holdings, Jumbo, Lamda, Motor Oil, Optima Bank, PPA, Quest, Sarantis and Titan.
A total of 30 listed companies will be classified in the Micro Cap category.
It is obvious that the entry of Euronext Athens into the developed markets category, a capital “pool” exceeding 18 trillion dollars, gives Greek groups, businesses and companies a different scale, offering access to “deep pockets.” This is an evolutionary process, with its outflows-inflows, opportunities-traps and advantages-disadvantages from the adjustment that will continue to unfold.
However, focusing on today's session, the historic rebalancing is synchronized with triple witching, foreshadowing price formation that will be suitable both for reducing positions and for new placements. The outflows in the smaller categories are estimated to be of interest, and this is because the allocation of inflows is extremely uneven, with 87% directed to the banking sector.
Indicative of the trend and the intentions of foreign fund managers is the Bloomberg report on the new boost for banks from the upgrade.
A small foretaste was given yesterday, as out of a total turnover of 548.4 million euros, about 265 million was carried out in the shares of Eurobank, National, Alpha Bank and Piraeus. The main part is today, and its “tail” on Monday-Tuesday.
In this context, the climate is heating up from significant individual developments, indicative among them the in-principle PPC-Amazon agreement and the prime minister's assurance that the refining groups will contribute to the effort to manage the problem of expensive fuels (therefore the potential risk of a new extraordinary tax levy is almost eliminated).
Today's session is a starting-point session, as the Greek stock market is indeed joining the developed markets by FTSE/Russell and STOXX, but remains in emerging markets for Moody's. A period of eight months follows with particular characteristics and new data.