Greece Is The Best Stock Market In Europe In 2019

. Photographer: Yorgos Karahalis/Bloomberg

© 2017 Bloomberg Finance LP

Greece’s stock market is leading a rebound in European stocks so far in 2019.

The Global Shares X FTSE shares have gained 14.83%, the iShares MSCI Netherlands 12.5%, the iShares MSCI Ireland 10.70%, and the iShares MSCI UK 12.3%.

Europe’s Top Performing Markets In 2019

Country ETF 2019 2018
Global X FTSE shares Greece 14.83% -31.2%
iShares MSCI Netherlands 12.5 -15.4
iShares MSCI Ireland 10.7 -21.9
iShares MSCI UK 12.3 -14.3

Source: 3/23/19

For years, Greek equities were on a losing streak. They mirrored the Greek economy which , under the pressure of a mounting debt burden, was floundering in the swamp of its worst post war depression.

But the worst may be over, as evidenced by several macroeconomic indicators.

One of them is the rebound in the Greek GDP, up 1.6% year-on-year in the fourth quarter of 2018, according to That’s following a 2.1% growth in the previous three-month period. Both figures are well above the average 0.90% from 1996 until 2018, well above the record low of -10.20% in the first quarter of 2011.

Greece’s GDP has rebounded thanks to a surge in exports, which reached an all-time high of 3144.50 EUR Million in October of 2018; and a surgein tourism revenues, which also reached an all-time high of 3601.30 EUR Million in August of 2018.

Greece’s exports and tourism have been helped by a big improvement in the country’s international competitive rankings, from 96 in 2013 to 57 in 2018.

Then there’s the unemployment rate, down to 18% in December 2018 from 18.3% in the previous month. It’s the lowest level since July 2011, and well below the all-time high of 27.90% in July of 2013.

And there’s a big fiscal turnaround. The Greek government registered a record budget surplus equal to 0.80% of the country’s GDP in 2017, compared to a record deficit of -15.10% of GDP in 2009.

Meanwhile, Greece is beginning to live within its means. It registered a Current Account deficit of 0.80% in 2017, compared deficit of -15.20% in 2007.

International credit rating agencies have taken notice, upgrading the country’s credit-worthiness in recent months.

That’s a transformative development for Greece’s ailing economy that has allowed the nation’s government to get back to debt markets once shunned — paving the way for an end the vicious cycle of austerity; and payment to the IMF.

That will be a big benefit for Greece, according to Theophanis Matsopoulos, Athens Chamber of Commerce and Industry Counsellor.

“The interest rate of these loans is 5.13%,” says Matsopoulos. “In terms of loan restructuring it would be a wise move since Greece can borrow from money markets with lower rate. Annual benefit will be approximately 70 million euros for the governmental budget.”

Greek Treasury Yields


In the wake of a strong rally thus far this year, the upgrading of the national economy by international credit rating agencies is a game changing for Greek equities.

But is it sustainable?  Stathis Giannikos, from Athens-based Pushkin Institute, doesn’t think so.

“I see the rally fading after the elections,“ Giannikos says. “In Greece many problems remain, and they have to be addressed after the elections. Like the non-performing loans in bank balance sheets, which could end up depressing real estate prices once they are unwind.”

Then there’s the country’s debt, which stands at 178.60% of the country’s GDP, close to the all-time high of 180.80 percent in 2016 in 2016. And the lack of investment, which stands at 4981.44 EUR Million in the fourth quarter of 2018, near the record low of 4766.16 EUR Million in the second quarter of 2015.

While it’s unclear whether the recent rally is sustainable, one thing is clear: Greece will rise again — helped by democracy and human development, offering great opportunities for long-term investors.

Disclosure: I own shares of GREK and Greek banks.

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