🏛️ Greek Stock Market Plunged 90% to 475 Points — Now It’s Booming and Heading Much Higher

Recently, the Greek Stock Market Has Entered a Booming Phase—But Why?

 

Greek Economy at a Glance:

The Greek economy has been in a deep recession for five consecutive years. GDP declined by 6.9% in 2011 and is expected to contract by around 5% in 2012. Additionally, unemployment is projected to reach 25% in 2012. The economy is expected to return to growth in late 2013, according to recent statements by Prime Minister Mr. Samaras.

 

ASE Stock Market Index Today at 752 Points

The Greek Stock Market Index (ASE – Athens Stock Exchange) closed at 752.2 points on September 25th. This marks an increase of approximately 58%—or 277 points—above its June 2012 low of 475, as shown in the chart below.

 

Why Is the Greek Stock Market Rebounding?

Over the past two years, the Greek Stock Market has been extremely bearish, losing around 90% of its value. The current rebound is considered a normal market reaction. Even now, Greek stocks appear to be undervalued. With the ASE at 750 points, the total market capitalization stands at approximately 29 billion euros, compared to a national GDP of around 190 billion euros. That results in:

∟ ASE Capitalization / GDP = 15% (a notably low ratio, even given Greece’s economic challenges)

 

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 could push the Greek Stock Market to around 950 points (estimated), representing a 100% return from its June low of 475 points.

 

Trading Center Strategy — For Those Interested in Buying Greek Stocks

If you plan to invest in Greek stocks or ETFs, focus on companies that meet the following criteria:

1. Their revenue is not heavily dependent on government spending or bank lending (e.g., avoid the construction industry).

2. They are not banks (Greek banks are expected to raise capital in 2013, likely at prices well below today’s levels).

3. They have significant exports, accounting for at least 40% of total turnover (this helps them benefit even if Greece exits the euro area).

4. They have manageable debt levels (debt less than 50% of turnover).

 

Here Are Some Strong Companies Listed on the Greek Stock Market:

1. Intralot S.A. (Symbol: INLOT) — Multinational with strong fundamentals and an aggressive strategy. Market value: €216.2 million.

2. Mytilineos S.A. (Symbol: MYTIL) — Multinational with strong fundamentals, P/E = 6.23. Market value: €384.7 million.

3. Titan S.A. (Symbol: TITK) — Cement producer, multinational, has survived two world wars. Market value: €232.4 million.

4. Opap S.A. (Symbol: OPAP) — Gambling company, state-owned but soon to be privatized. Market value: €1,231 million.