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Time to buy Greece? -Our Strategy


Greek Stock Market Slumped 90% to 475 points -Now its booming and head far above

Recently the Greek Stock Market has entered a booming phase, but why?

Greek Economy at a glance: The Greek economy is in deep recession for five years in a row. GDP decreased 6.9% in 2011, and is expected to decrease about 5% in 2012. Furthermore unemployment is reaching 25% in 2012 and the Greek economy is expected to return to growth at late 2013, as the Prime Minister Mr. Samaras has recently claimed.

ASE Stock Market Index Today at 752 points

The Greek Stock Market Index (ASE –Athens Stock Exchange) closed at 752.2 points in September 25th and it is about 58% or 277 points above its low of 475 in June 2012 as it can been seen in the following chart.

Chart: 5-Year ASE Chart

Sample picture

Source: Trading Center, Metastock

Why the Greek Stock Market is rebounding?

In the past two years the Greek Stock Market has became extremely bearish and fell 90%. The current rebound is considered as an absolutely normal market reaction. Even today the Greek stocks seem to be considerably cheap. The total capitalization at 750 points is about 29 billion Euro, while the country’s GDP is something about 190 billion Euro. That means ↓

ASE Capitalisation / GDP = 15% (which is very low even for the dramatic Greek Economy)

 

ASE Index Basic Price Statistics

Period

Low

High

Change (%)

7 Days

739,52

790,71

-0,5

30 Days

628,4

790,71

16,43

3 Months

556,57

790,71

32,71

6 Months

471,35

790,71

-1,97

12 Months

471,35

847,63

-4,14

  

Our Opinion

The current rally may lead to 950 points (estimation) where the Greek Stock market will perform a 100% return from its low in June (475 points).

Trading Center Strategy -For those who like to buy Greece

If you plan to buy Greek Stocks / ETFs you should focus on Companies which incorporate the following characteristics:

1) They don’t base their revenue in Government Spending and in Bank Lending (for example construction industry)

2) They are not Banks (Greek Banks will be forced to increase their share capital in 2013, in prices far below than today’s)

3) They are exporting heavily, at least 40% of their total turnover (so even if suddenly Greece exit euro area those companies will benefit)

4) They are not exposed to heavy debt (less than 50% of their turnover)


Here are some good companies listed in the Greek Stockmarket

1) Intralot S.A. / Symbol {INLOT} {Multinational, strong fundamentals and aggressive strategy / Market Value 216.2 million euro}

»Web-site

2) Mytilineos S.A. / Symbol {MYTIL} {Multinational, strong fundamentals P/E=6.23 / Market Value 384.7 million euro}

»Web-site

3) Frigoglass S.A. / Symbol {FRIGO} Coca-Cola Refrigerators {Multinational, very good company / Market Value 232.4 million euro}

»Web-site

4) Titan S.A. / Symbol {TITK} Cement {Multinational, survived two World Wars / Market Value 232.4 million euro}

»Web-site US department

5) Opap S.A. / Symbol {OPAP} Gambling {State Company that it will soon be privatized / Market Value 1,231 million euro}

»Web-site

  

If you would like to read more about the Greek Stock Market and listed companies in the future »let us know

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