A new generation of investors, more “quality” and long-term, is being created for Greek assets, after the recovery of investment grade. This fact is more tangible in Greek bonds, while for Greek stocks it is expected to happen as we get closer to the transition of the Greek stock market from emerging to developed markets.

The investment grade title allows a much larger audience of investors to invest in Greek assets. This is due to the fact that in developed markets the assets under management reach 52 trillion. dollars, compared to only 6.3 trillion dollars in emerging markets.

Major fund managers are now positive about Greek bonds, after the recovery of investment grade and the inclusion of Greek bonds in the IG indices, thus creating a new generation of investors in Greek securities.

Vanguard Asset Management, the world’s second-largest asset manager, and Candriam, which oversees €140 billion in assets, are buying government bonds from countries in the European periphery, including Greece, while UBS, JP Morgan, Goldman Sachs, Citi and Societe Generale, with their previous reports declare “bulls” for Greek bonds.

With the investment grade, Greek bonds are also on the radar of international investment funds that invest in bonds and managed about 28 trillion. US dollars in assets.

The investment tier will bring new inflows into Greek bonds, from index funds, which are estimated by BofA at 16 billion euros, according to its report at the beginning of the summer.

This is a significant amount, given that there are only €74 billion of Greek bonds in circulation, of which €35 billion are held by the ECB.

The Stock Exchange

The recovery of the investment grade creates a different investment audience for the Greek stock market and puts its upgrade in the developed markets on the final stretch. In 2024, AXA is likely to be placed on a “watch list” for reclassification in developed markets. The conditions are being formed to examine the scenario for placements in the Greek market by Investment Agencies, the passive index funds that adjust their investments with the main indices, representing 60 trillion. dollars!

The emerging markets, in which the ASE is “trapped”, 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%.

As reflected in the Greek investment forum of JP Morgan in New York, last Thursday, the emblematic introduction of El. Venizelos on the Athens Stock Exchange will not just be a new listing of a company but a move that will re-introduce the Greek market abroad. Already in the first hours of the public offering of AIA shares, there was a high interest from foreign institutional investors.

The banks

Also the powerful managers who participated in the Greek investment forum of JP Morgan and who manage over 20 trillion. dollars also showed interest in the planned disposal of the shares of Piraeus held by the HFSF (27%) and later of the shares of Ethniki (18.39%).

Indicative of the quality of investors expressing their interest in Greek banks, it was reflected in the placement for the 22% of the National Bank held by the Financial Stability Fund (HFS). The offering exceeded 8 billion euros, attracting leading institutional investors. The quality of international investors was also excellent as the majority are long-term investors (64%) and institutional investment funds (27%).

The increased interest of foreign portfolios in Greek banks is also reflected by their strong presence in their latest bond issues.

The recent exit of Ethniki to the markets through the issuance of a 5-year senior preferred bond gathered offers of more than 2.4 billion from more than 200 investors, exceeding by more than 4 times the amount of the issue. Over 70% was allocated to Fund Managers, Insurance and Pension Funds.

The Piraeus issue (10-year Tier 2 bond) was more than three times oversubscribed having raised over €1.8 billion in capital with the participation of more than 145 institutional investors.

The auction of Eurobank’s 10-year bond was completed with a significant oversubscription, by 6 times, while the offers reached 1.8 billion euros, with high interest from foreign funds.