The rating agency put it on hold. Moody's The Athens Stock Exchange. With the grade maintained at Ba1, with a stable outlook, with positive reports of all that has been achieved, but highlights upcoming risks and additional moves to be completed by the next assessment.
Moody's report and assessment of the Greek economy did not really open the door for the Athens Stock Exchange to enter major investment hubs. So domestic is an appointment capital market With the biggest investment houses on the planet, postponed to September 2024. Because the essence of improvement and recovery of “investment quality” is not a theoretical one. This is not a message of reward or congratulation to the government and the place. This is the green light for new investment funds to enter the domestic equity and bond markets.
Well, this long-awaited inflow of new capital is postponed until the fall, reinforcing demand for existing stocks and bonds. Because according to Moody's, there may be many positive steps taken and improvement in many qualitative and quantitative aspects, but there are risks.
So Moody's didn't stamp an official ticket last Friday.”Investment grade“, considering the level of risk is still there and visible. Although S&P and Fitch both gave green flags. Bond markets gave their own informal but essential “OK”, with the cost of ten-year Greek government bonds falling to 3.20%, as ten-year German bonds were below 90 basis points. .
The truth is Greek government It currently enjoys the same borrowing costs as Cyprus and Spain, while it borrows less than Italy, whose ten-year bond interest rate is 3.60%. In other words, among certain types of investors investing in debt markets, Greek bonds are considered reliable and worthy of investment.
The same is true of the Athens Stock Exchange. Foreign investors buy stocks without getting an official “OK” from Moody's. Perhaps, they are more risk-averse investors. Perhaps, it is Finance People who do an informal “front run,” that is, sell at a profit and buy stocks waiting for an uptrend to use their capital gains. Most likely, they are investors who want to participate in the growth “story” of the Greek economy. Investors may see opportunities due to listed companies' increased profits, higher dividend distributions, capital gains and “deals”. They are probably investors for whom the country risk is valued lower than the expected return.
In short, the reality shows that a large portion of foreign investors feel that an upgrade to “investment grade” by Fitch and S&P is sufficient. However, Moody's Friday “suspension” served as a deterrent to foreign investors who had been waiting for the rating agency's stamp of approval to move.
So, at this stage, fresh funds are not expected from institutional investors who were expecting a favorable verdict from Moody's. At the same time, as we mentioned above, some liquidation may also be seen from implemented funds.runs ahead“. They will have to wait until September 2024 for the next Moody's report and rating.