Goldman Sachs: New vote of confidence in Greek stocks – Greece, the story of tourism in 2022

Her Eleftherias Kourtali

Goldman Sachs maintains its preference for Greek stocks in the emerging markets environment, continuing to estimate that they will note the highest returns in the 12-month horizon, as Greece points out it has the “weapon” of tourism and will stand out this year.

It is noted that yesterday HSBC also stated that it remains overweight in Greek stocks, despite the energy crisis and the war in Ukraine, as it estimates that tourism is expected to be the “key” in the development story of Greece this year.

In a new report on the effects of the Russian invasion of Ukraine on emerging markets a month after the outbreak of the war, Goldman Sachs points out that funds investing in these assets have come under considerable pressure.

The “double whammy” of large liquidations in both Russian and mainland China has put significant pressure on emerging market stocks this year, especially in the last month, Goldman notes. The key MSCI EM index is currently 8% below the beginning of 2022 (in US dollars) and funds investing in the emerging markets area have so far underperformed in the first quarter (average yield -9.6%).

These pressures relate exclusively to February, which marked the most painful month of return in history for the 30 largest equity funds in emerging markets, according to Goldman Sachs.

In this context, the US Bank emphasizes that it advises investors to focus on rotation strategies in Latin American markets, in markets based on tourism such as Greece and the region of Southeast Asia, and in markets of the Middle East and North Africa, such as Saudi Arabia.

Regarding Greece, Goldman maintains the target for the General Index at 1,175 points over a 12-month horizon, while it estimates that the earnings per share of the Greek listed companies will increase by 17.8% this year and by 21.5% in 2023 , which is the highest growth in the whole environment of emerging markets. The P / E of the Greek market is placed at 10x, while the dividend yield is placed at attractive levels of 3%.

In terms of returns, he estimates that the ATHEX in 12 months from today it will record the seventh best yield, close to 30%, after the markets of Hungary, Poland, Egypt, the Czech Republic, South Africa and China.

More generally, Goldman Sachs points out that the significant oversupply of Latin American stocks may be of concern to investors as these markets may have less room to “run”, but it notes that the starting point for Brazil and Chile in particular , was quite low in early 2022 and thus remains overweight in these emerging markets. Of the markets that have performed the most, namely CE-3 (Czech Republic, Hungary, Poland), Greece and Egypt, it regularly remains more positive in Poland and also likes, as he emphasizes, Greece as the tourist story of 2022.