J.P. Morgan upgraded its recommendation for the Greek market to "overweight" from "neutral", citing the expected inflows of funds of approximately $1 billion from the inclusion of certain Greek shares in the European stock exchange benchmark later in the year.
According to the U.S. investment house, inclusion in the Euro STOXX index is expected to take place at the revision on 18 September, while also upgrading the weighting of the shares of the Central and Eastern European, Middle East and Africa (CEEMEA) region in its investment portfolio.
Greece has recovered from the debt crisis that began in 2009, with the government paying back rescue loans and reducing public debt earlier than the planned timetable.
The global stock exchange index provider MSCI announced last month that it plans to reclassify Greece in the developed markets in 2027, highlighting the country's economic and financial recovery after its downgrading in 2013.
J.P. Morgan estimates that Greece could attract investment interest from both developed and emerging market investors during a transitional period of eight months, during which it will continue to participate in the MSCI Emerging Markets index, while at the same time joining an important European stock exchange index.
The Greek banks, which were recapitalized during the crisis, have now returned fully to private hands, while several of them have restarted the distribution of dividends.
The US investment bank estimates that the four largest Greek banks -Eurobank, National Bank, Piraeus Bank and Alpha Bank - will join the STOXX index.
At the same time, the General Index of the Athens Stock Exchange also reflects economic recovery, recording last year's strongest annual performance since 2019. From 2021 to today, its value has more than tripled.
J.P. Morgan points out that Greek shares continue to negotiate at a discount compared to the wider emerging markets, despite the recovery of the Greek banking industry. According to its data, the Greek market is valued at 10.8 times the estimated profits of the next 12 months, compared with 11.3 times for emerging markets as a whole.
On a political level, J.P. Morgan estimates that the New Democracy, placed in the centre-right area, remains the dominant party to win the next election, which, according to the house, supports maintaining a stable economic policy environment.
