Jefferies restated its positive (bullish) attitude towards the Greek market, noting that its confidence in the recovery of the economy was rewarded by the increase in tourist arrivals that strengthened the current account balance, as well as corporate results.

However, as it estimated, after strong growth in 2022, the Greek economy will record a “shallow” contraction/recession for 2023, with imbalances increasing, as a result of high inflation, at 12% and the deep difference in TARGET 2.

Slowdown ahead

Although economic momentum has supported an impressive uptick in earnings and sales revisions, with business confidence rising, industrial production steady and factory capacity utilization rates moving above the long-term trend, the Manufacturing PMI, however, points to a slowdown ahead, with new orders falling as higher product prices hurt demand.

The biggest challenge

The biggest challenge lies in the consequences of the energy shock caused by the Russian invasion of Ukraine, although Greece has made significant progress in the energy transition, with the Greek electricity system running entirely on “clean” renewable energy for the first time earlier this month.

Although the domestic equity market looks a bit expensive relative to bonds, the Athens Stock Exchange is in the midst of a positive review of corporate earnings, with Jefferies maintaining its bullish stance on Greek stocks. The Greek basket of shares it monitors concerns the securities of Motor Oil, PPA, Jumbo, Helleniq Energy, Aegean and Mytileneos.

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