This guide is intended to provide the basics of the Greece stock market.
First things first: What is a stock?
In Greek stocks are called ανατοκισμός εταιρείες μετοχών, which means ‘shares of public limited companies’.
The Athens Stock Exchange has been one of the most active trading floors since it was established in 1876. Since then, there have been over 2,500 companies listed on the ASE. Some have been privatised and delisted, while many have stayed on the exchange.
The Athens Stock Exchange is a market index that measures stock price movements in the Greek stock market. It includes all listed shares of companies with a primary listing on the ASE as well as those traded “over the counter” (OTC) through an electronic communication network (ECN). The base value was set at 1,000 for the first trading session of each new year; since then, it has increased to more than 3 trillion euros.
Each day, major newspapers such as Kathimerini report current prices and daily changes to provide Greeks with real-time updates about their equity portfolios without requiring them to check share prices online or visit brokerage houses. It is mainly because the Athens Stock Exchange is one of Greece’s most successful markets.
As well as being a benchmark for general share performance in the country, the ASE also benefits from an expansive range of index funds based on movements within it. It means that Greeks have ample opportunity to track their investments without paying professional fees.
And what about Greek stock exchanges?
Greece has two primary exchanges: The Athens Stock Exchange (ASE) and its older rival, the Cyprus Stock Exchange (CSE). Both blue-chip trade stocks as well as government debt. The CSE focuses almost exclusively on Cypriot stocks, while the ASE manages Greek and international shares.
The indices include banks, insurance companies, industrial companies, construction and contracting companies, hotels and resorts, media, consumer goods etc.
What are the benefits of stock trading in Greece?
Greek stocks give a good yield:
The Greek Stock Index was up +3% year to date as of 12/5/17. That is better than the UK (+1.6%), US (+1%) or Germany (0%).
Greek Government Bonds also give a good yield: currently between 4-5%. In comparison, yields on German bunds have fallen into negative territory – i.e. investors have to pay for holding them!
Greece is a good place for international business:
Greece has been trying hard to re-establish itself as an attractive destination for foreign investment. The stock market offers one way for overseas companies to boost their exposure locally. The ASE index offers access to over 500 businesses, which offers considerable diversification – making it comparable to investing in many smaller markets.
Greek stocks will grow
We don’t know how long the Eurozone crisis will last, but we know that Greek stocks are cheap relative to earnings, book values and other factors. It makes them excellent value as soon as the country’s economy begins growing again (which it seems likely to do).
That should make prices rise faster than in other countries – giving you a great chance of seeing the value of your investment multiply.
Why is this information important for Greece?
Many investors invest in the Athens Stock Exchange and Cyprus Stock Exchange stocks. The increase in stock prices will positively impact the Greek economy (an increase in income, more investments).
Even though Greece’s economic indicators are still behind where they were before the crisis (and thus still facing some uncertainties), it has come far enough to be optimistic about its prospects and one of the best investment opportunities in Europe.
Investment in stocks, including foreign ones, provides Greeks with a way to increase their income without leaving Greece or working more hours. And that’s something that can help most people.
Bottom line
Stock trading is a good option for all Greeks who want to diversify their investments and earn more returns. Stock trading is an accessible form of financial market investing that requires a relatively low capital outlay, is flexible enough to allow investors some control over risk exposure and offers the potential for high returns – but carries substantial risks.
