By Chrysostomos Tsoufis

In addition to the vote of almost 41% of those who went to the polls, SW it seems that the markets also “voted”.

Upon hearing the results that brought ND 21 points ahead of SYRIZA with a clear prospect of self-reliance in the next election, likely on June 25, the yield on the 10-year bond fell 58 basis points, or 1.4%, to 3.85%, its lowest this year. The Greek title had a similar level in December of last year. At the same time, the spread against German bonds also decreased from 157 points on Friday to 140 for the first time since the end of 2021. Greece, although not investment grade, is only 40 points below Italy. The 15-year and 20-year bonds also moved down by 55-56 points.

Indicative of the nullification of the electoral risk is the fact that there was a huge reduction in short-term borrowing costs. 37.5% fell in monthly interest bonds, 21% in 3 months and 12% in six months which fell below 3% for the first time since the end of March.

The 5-year risk premium – i.e. the cost of securing money against the default of the Greek government – ​​fell by 10 basis points, to 1.02% according to the S&P Markit Data.

The Greek stock market also experienced “big losses”. The general index closed with an increase of 6.1% and exceeded 1200 units for the first time in the last 9 years, specifically since March 2014. It is typical that the turnover touched €360,000,000, an unprecedented price for this year and a high for the year as A typical day’s trading volume on the Athens stock exchange in recent years is between €50-70m. Of course, the market has shown its preference for a long time as it had discounted the victory of the ND for many months, so slowly but surely the general index has recovered. I remember that at the beginning of last July it was at 779 units.

The banking index soared by almost 12.5% ​​and is now a breath away from 1000 points, at 991, for the first time since May 2018. It is no coincidence that the biggest gainers were the shares of National Bank and PPC whose nationalization was promised by SYRIZA in its program.

After all this, it is not surprising that Moody’s, which maintains the country three steps below the investment grade, assesses the result of the elections as credit positive and will probably upgrade Greece’s credit rating on September 15. The rating agency emphasized in a note that the polls produced a result that strengthens the possibility of continuing fiscal policies and reforms. At the same time, many analysts were commenting in the media that May 21 brought the country much closer to its burning desire, which is the recovery of the investment grade.

Is she close enough to give it to us? Fitch on June 9 or we will have to wait until October 20 and Standard & Poor’s decision.