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The Greek market has yet to attract the long awaited interest of investors despite the tangible improvement in the macroeconomic position of the country. Green shoots of recovery are evident across the board: the unemployment rate has dropped to 19.5%, down from 27.8% in 2013, the Purchase Manufacturing Index has remained above the 50 expansion mark for 14 consecutive months, industrial production, retail sales and most indicators confirm a substantial improvement. At the same time, the credit rating agencies are now upgrading the country at an accelerating pace, with Fitch rating the Greek government bonds at just 3 notches below investment grade.

We believe that the aforementioned trajectory of a gradual recovery may not be overshadowed for much longer by the general concerns of a crisis in emerging markets, with Argentina and Turkey as the forerunners,  and concerns that the government may try to regain the support of the electorate in expense of the already agreed reforms. We have to remember that Greece will remain under strict surveillance after the end of bailout period, with quarterly reviews continuing for several years. At the same time, it is obvious that the Turkish crisis has weighed unfairly on the Greek market. This due to the fact that the economy is not highly dependent on Turkey, with just 6.8% of exports directed there and since Greek banks have reduced their exposure to just €115mn, down from €26bn two years ago.

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(Reporting by Petros Mylonas, Head of Southern Europe)