The investment grade recovery paves the way for the return of the Athens Stock Exchange in the developed markets, which is expected to happen towards the end of 2024, with the beginning of 2025.

It is estimated that in a few months after reaching the investment grade, the houses will put the AX on the “watch list for upgrading”, which will be an important “signal” for strengthening the positions of investors in Greek shares.

The return of A.A. in developed markets it is a bet of great importance for the Greek stock marketwhich, due to the great financial crisis and the downgrading of the country’s credit rating, lost its position in the indices of developed markets, with the result that since then the Greek market only draws capital from the small “pool” of investment portfolios and hedge funds that are placed in emerging markets, which negatively affects trading activity and stock valuations.

The emerging markets, in which the ASE is “trapped”, they are a very small part of the global investment “pie” and attract correspondingly small funds. For example, in MSCI’s global index the weighting of emerging markets is only 13%.

On Wednesday, June 12, 2013, the Greek stock market was downgraded by the world’s most important rating index, MSCI, with assets of 12 trillion. dollars, which is followed by the biggest international houses. A similar downgrade has not occurred for any other developed market stock market.

The return to developed markets will change everything the “map” of the market, as it will be easier to make decisions on investments and taking positions on the A.H.E. by the managers’ risk committees.

The return of A.A. in the developed markets is a bet of great importance for the Greek stock market, which, due to the great economic crisis and the downgrading of the country’s debt, lost its position in the indices of the developed markets, with the result that since then the Greek market only draws funds from the small “pool” of investment portfolios and hedge funds placed in emerging markets, which negatively affects trading activity and stock valuations.

The investment grade “security” allows a much larger audience of investors to invest in Greek assets. This is due to the fact that in developed markets assets under management reach 52 trillion dollars, compared to only 6.3 trillion dollars. dollars in emerging markets. It should be noted that “passive” funds invest approximately 88% in Developed and only 12% in Developing

It should be noted that the A.A. receives ratings from three agencies, MSCI, FTSE and S&P. Everyone sets their own terms and conditions for joining the mature markets.

According to Axia’s data, the capitalization of A.A. (as a % of GDP) was just 28.5% in 2022, compared to pre-crisis levels of 78%. Although a return to these levels is very difficult, the house believes that by 2025 this ratio will jump to 46% (about €105 billion capitalization using an estimated GDP of €230 billion after 2025). This will be a combination of higher valuations, taking into account the entry of new companies.

Greece’s achievement of investment grade status and AXA’s transition to developed markets will act as catalysts for future growth, as Axia notes.

The stock market has seen a big move up from October 2022 and around 850 points to 1350 points in July 2023. Much of this move is due to the discounting of the investment grade recovery. In the last five months, foreign investors have recorded outflows of 535 million euros.

Clearly the funds that will enter the market will do so gradually and not in one session. After all, there were many funds and investors who have already placed themselves in the market in the previous long period with significant profits. Some of them will want to get them.

Although the AXA upgrade in developed markets may come 12 – 24 months after investment grade, market dynamics tend to be pre-positioning, resulting in increased trading volumes and corporate actions.