OR upgrading the Greek stock market from emerging to mature markets, is an important element of the new Greek story, as is made clear by the recent statements of Prime Minister Kyriakos Mitsotakis, and also of the Prime Minister’s Economic Adviser, Alexis Patelis.

The prime minister in the meeting he had with representatives of the powerful Funds in New York, during his recent visit, he characteristically stated: “as last year the goal was to obtain the investment grade, in 2025 our goal is for the Greek stock market to acquire the status of the developed market”, stressing that “this is very important for us ».

And the Economic Adviser to the Prime Minister Alexis Patelisat the recent conference of Société Générale in Paris, organized in collaboration with the Athens Stock Exchange, stated that after the recovery of the investment grade from our country, the goal remains the upgrading of the stock market in developed markets.

In the vestibule of the upgrade in developed markets he put the Athens Stock Exchange last Tuesday and the house FTSEafter the house S&P which had made a similar move last August, as it 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. Everyone sets their own terms and conditions for joining the mature markets. The house MSCI in his recent evaluation, he 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 indexes, 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 found 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 the Greek market only draws capital from the small “pool” 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 JP Morgan report 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.

First in the village or last in the city? The “answer” of the CEO of the Athens Stock Exchange Group, Mr. G. Kontopoulouwhich he likes to give is: “A top-placed Super League 2 team aims to get promoted to Super League 1.

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 due to exits from the FTSE Emerging Market indices and inflows of $1.75 billion due to entry into the indices from the indices FTSE Developed Market . Therefore, the balance will be negative, i.e. an outflow of approximately 75 million euros.

According to her Axia Research IG credit rating is particularly important for active flows, while the status of developed markets is more relevant for flows of funds that track indexes (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.