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Citis Guide to Greek Stocks

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Citi presents a “Guide to Greek Stocks”, ahead of Greeces inclusion in MSCIs EM index from 26th November, in its Greece Strategy report dated October 2nd.

Citi covers 11 Greek stocks (ex-CCH) with a combined market cap of $35bn or 60% of Greek market cap and six out of the eight stocks in the provisional MSCI Greece index. It stresses that it doesn’t try to call the market but rather look to provide a framework for investors as well as our ‘Greek Hero’ stock ideas.

Citi economists see the fiscal adjustment process as ongoing with sustained real and nominal GDP some way off, despite a more optimistic tone from officials and improving data points.  As far as the political system is concerned Citi economists believe that It seems stable for now.

The risk of Greece leaving the euro remains, but it is not Citi’s base case.

Stock selection is increasingly important post rally and the uncertain macro backdrop, in Citi’s view, who likes stocks that have demonstrated ability to restructure operationally and financially through the crisis, are well positioned for economic stabilization and eventual recovery and are reasonably priced historically and versus peers. Citi highlights OTE and PPC, which fit those criteria, in its view.

 

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