Its upgrade Stock Exchangeis one of the major goals of the government, as he emphasized in his written message and Prime Minister K. Mitsotakis to the world’s largest fund managers, at the recent investment conference organized by Morgan Stanley in collaboration with the AX in London.

In his message, the Prime Minister emphasized: “A few years ago, I promised that Greece would regain its place in the investment tier – and last year, that happened. Today, I am here to tell you that Greece is on track for a new milestone: the upgrade of the Athens Stock Exchange to developed market status.”

The upgrading of the Stock Exchange in the developed markets is our big goal, recently emphasized the Managing Director of the Athens Stock Exchange, Mr. C. Kontopoulos, during the presentation of the new corporate identity of HEXA. With the upgrade, the prestige and image of the AX will be strengthened, attracting more investment funds. Listed companies will have access to more funds, which invest in developed markets, strengthening the growth of the Greek economy.

Much discussion had been caused by a previous report by JP Morgan according to which Greece would be better off staying in the Emerging Markets.

First in the village or last in the city? The “answer” of the CEO of the Athens Stock Exchange Group, Mr. C. Kontopoulou, which he likes to give is: “A Super League 2 team that is in the first positions has the goal of moving up to Super League 1”.

For the last two years, the management of the A.X. has been working on the goal of upgrading the Greek market, in order to achieve it in the next 12-18 months, with the aim of attracting more investment funds, as the A.X. is already on a watchlist of upgrades FTSE Russell and S&P DJI for imminent reclassification to the developed markets category.

FTSE and S&P have put the Athens Stock Exchange at the forefront of the upgrade to the developed markets, as they have included it in the 2025 watchlist, when the final decision will be made on its return to the category of developed markets. It should be noted that the A.A. receives ratings from three agencies, MSCI, FTSE and S&P. Each one sets its own terms and conditions for joining the mature markets. MSCI, in its recent evaluation, did not proceed with the inclusion of the Greek stock market in the “watch list for upgrading”. It is worth noting that 70% of the funds follow the MSCI indices, making the upgrade from the MSCI house a critical factor.

MSCI is the most important index, as it has assets of 12 trillion. dollars, while he is watched by the biggest international houses and influences the most serious investment portfolios.

Inclusion in the indices of developed markets will further strengthen the liquidity and depth of the Greek market, creating a “virtuous circle” that will contribute to the development of Greek businesses and the Greek economy in general.

The Greek stock market is the only Eurozone stock market that has been downgraded since 2013 and was moved from Developed Markets to Emerging Markets.

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

Among the positives of the upgrade, we should also mention the difference in funds traded in emerging and developed markets. About 2 trillion dollars are traded in the first category and about 15 trillion in the developed ones. So the “pool” of capital in developed markets is much larger.

Much discussion had been caused by a previous report by JP Morgan according to which Greece would be better off staying in the Emerging Markets. According to the House’s analysts, the Greek stock market has only three shares (Ethniki, Eurobank and OPAP), which have the quality for the MSCI Europe index, while in case of reclassification it would be the smallest Market of MSCI Europe, behind Portugal and Austria.

At the same time, there is a question mark about the funds that will enter the Greek stock market after a possible transfer to the club of developed markets.

JP Morgan estimates that in the event of an upgrade of the Greek stock market, there will be outflows of 1.83 billion. dollar due to exits from the FTSE Emerging Market indices and inflows of 1.75 billion due to entry into the indices by the FTSEDeveloped Market indices. Therefore, the balance will be negative, i.e. an outflow of approximately 75 million. euro.

According to Axia Research IG credit rating is particularly important for active flows, while the status of developed markets is more relevant for the flows of funds that track indicators (indexed funds, mainly ETFs). However, since the majority of investment funds (62% of the total) are still not indexed, this means that the majority of funds can invest in Greece after upgrading to investment grade rather than developed market status.

Also, passive funds linked to developed market status represent only 14% of EU invested assets, meaning they are less important to the overall picture. Therefore, Axia emphasizes, the investment tier is the one that will bring the majority of incremental inflows to the AXA.