Lionel Melin

Lionel Melin

Senior Cross-Asset strategist


2018: Athens in the re-starting blocks

18 Jan 2018

Active Strategies

Greek 3rd bailout program ending on August 20 implies: (1) bond market issuance ahead of it, (2) banks’ recapitalization if needed, and (3) debt sustainability/forgiveness negotiations 

  • Ahead of bailout program end, Greece needs to be able to finance itself in markets
  • Light reimbursement calendar opens window for issuance in calm markets
  • Non-Performing-Loans (“NPLs”) need to be worked down, while banks’ recapitalization funds are already earmarked
  • Massive budgetary efforts & reforms should open the door to EU loan-trimming

 

Greek equities or bonds?

  • GGB yield spreads have already tightened to pre-crisis level
  • The ASE has underperformed the EuroStoxx300 by 80% since the Eurozone crisis started

 

Greek assets have potential to perform this year. We like Greek equities best.


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