Alpha Finance: Year with overperformance in 2022 for the Athens Stock Exchange

The Greek stock market can benefit from the above average GDP growth rates (> 8% in 2021 and about 5% in 2022 based on the estimates of the BoG Governor), mainly due to the increased foreign investment, the return of tourism at the levels of 2019, as well as the normalization of consumer spending, which is positively affected by the increased domestic deposit base, notes the Analysis Division of Alpha Finance in a report on its investment strategy for Greek stocks.

As he notes, in combination with the funds that will flow from the RRF, the positive effects of a possible upgrade of the country’s debt to an investment level within the next two years – a development that will expand the investment interest for the country – are expected to increase. total investments in Greece in the coming years as well as new capital flows to Greek shares.

In the short term, however, it should be noted that inflation (which had been identified as the main risk for the stock markets, a year ago in a previous report on the investment strategy in 2021), increased bond yields, and its rise energy costs, carry risks.

In contrast to last year, when stock inflows prevailed under the TINA (There Is No Alternative) logic, due to unprecedented liquidity channeled by central banks as well as government fiscal support, Alpha Finance analysts believe that 2022 will be marked by the transition from tech / growth stocks to more cyclical / value stocks such as banks.

At this juncture, the Athens Stock Exchange is favored, as it is characterized by a higher representation of banking shares at the level of General Index compared to other international indices, but also more generally by participation of companies with value and cyclical shares, an estimate that allows Alpha Finance to support This year will be a year of overperformance for the Greek Stock Exchange against the European and emerging markets.

For the universe of shares monitored by the Analysis Department of the company, an increase in EBITDA and earnings per share for 2022 by 10% and 20% respectively is expected, which brings the Greek shares to trade 7 times the EBITDA of 2022 and 14.3 times the net profit of 2022 (15.7 times if we exclude the banks), indicating a discount of 24% against the Eurostoxx index and 20% against the MSCI Emerging Markets respectively. At the same time, they offer a dividend yield of 3.1% or 4.0% if we exclude the banks.

For 2022, the exposure to banks is proposed (favored by the increase of yields and the progress in the reduction of MEAs), with the National Bank as the basic choice (strong capital, reduction of non-performing exposures to single digits soon), while from the rest of the companies are recommended as top picks o Mytilineos (strong profit growth profile, high aluminum prices), OPAP (production profile of strong free cash flows), as well as Fourlis (investment in logistics and e-commerce, new activities, new model IKEA, possible listing on Trade Estates REIC ASE). Potentially, PPC (shift to RES, valuation became more attractive after the recent correction) and the Greek Stock Exchanges (new Management, expectations for increased trading value) are also pointed out as alternatives.