Greek Stock Recovery dims as Europe Turmoil Flattens ASE
The curtain is coming down on Greece’s star turn with international equity investors.
Among the best-performing Europe gauges in 2013 after the government carried out the world’s biggest-ever debt restructuring, Greece’s ASE Index has become one of the worst, slumping 21 percent as lenders from Piraeus Bank SA to Eurobank Ergasias SA tumbled.
Investors are looking elsewhere in emerging markets for bargains as sanctions hitting Russia, Greece’s biggest trading partner, disrupt businesses.
“Greece was the trade last year, but I don’t think it’ll be the trade next year,” Garnry said in a phone interview from Hellerup, Denmark. “Investors looking for good returns should look elsewhere.”
The ASE has lost 11 percent since the end of June, the third-biggest drop among 92 national gauges worldwide, and is down 21 percent since reaching an almost three-year high on March 18.
The Stoxx Europe 600 Index has fallen 2.4 percent since June 30 amid crises in Ukraine, Iraq and Israel. The MSCI Emerging Markets Index has advanced 2.5 percent since then.
Russian sanctions on European Union food imports in retaliation to penalties over the Ukraine crisis threaten to derail the Greek economic recovery.
he value of trade between Russia and Greece totaled $9.3 billion in 2013, mostly in gas and oil, according to data compiled by Bloomberg.
Shares of Piraeus Bank, Eurobank and the National Bank of Greece SA — among the biggest on the benchmark ASE — have fallen more than 30 percent since March 18. Bank of America Corp. lowered its rating on Greek lenders on Aug. 5, citing uncertainty over how they will fare in European stress tests due later this year.
Bond investors too are walking away from Greece.
“Looking at the macro side, Greece actually looks quite good,” said Maarten-Jan Bakkum, an emerging-market strategist at ING Groep NV in The Hague. “This is a turnaround story. It’s not in a recession anymore. Greece has much more room in coming years to grow.”
Source: bloomberg
