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HSBC: Positive for Greece and Greek stocks

Her Eleftherias Kourtali

HSBC remains positive about Greece and Greek stocks as it estimates that tourism is expected to support the Greek growth story this year, despite the war in Ukraine and its aftermath, with Greek banks being the biggest catalyst for the Greek stock market.

Russia’s energy dependence has recently been a negative catalyst for Greece since the outbreak of the war, HSBC notes, with the Greek market positioned alongside the markets of Central Europe, Turkey and Egypt. worse performance since the day of the Russian invasion of Ukraine. However, looking at the positive side, tourism is a key macroeconomic lever for the country. Although the first part of last season was slow, it came back very strong in July to October. The government’s goal of returning tourism to more than half of the 2019 level has been achieved.

With COVID-19 vaccination levels in Greece high and those in much of the developing world lagging behind, Greece could see a very strong tourist season in 2022, with the chances of the first half of the tourist season also being strong, emphasizes HSBC. The loss of Russian tourists is unlikely to make a significant difference, according to the British bank.

Clearly, a significant part of the Greek story is related to the banks, whose shares represent about 35% of FTSE Greece, reiterates HSBC, which maintains its overweight stance on the ATHEX. The estimated P / E index for 2021 is at 6.5x and for 2022 at 6.6x, while the P / B index for both years is 0.45x. The decline in NPEs and asset sales lead to a significantly improved capital position. The leverage of the EU Recovery Fund could lead to strong growth of new loans and a significant improvement in profitability, at a time when Greek banks are at a significant discount compared to European banks, despite the corresponding levels of return on equity ROTE, as he points out.

HSCB places the shares of OPAP and Eurobank on the list of the best investment ideas from the region of Central Europe, Turkey and Egypt, in case the geopolitical risk premium falls. For OPAP it gives a target price of 16.50 euros and a buy recommendation, while for Eurobank it gives a target price of 1.45 euros and a buy recommendation as well.

HSBC: Positive for Greece and Greek stocks

Source: Capital

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