GREK - GREK: Greek Equities Are Relatively Undervalued And Offer Upside Into 2021
- Greek equities struggled to regain lost ground in 2020, but 2021 should provide some support as tourism picks back up.
- With vaccine roll-outs, and the potential for reduced spread of COVID-19 following seasonal temperature trends into the warmer months, tourism has the potential to bounce back into Q3 and Q4.
- This will support Greece disproportionately, as tourism represents about a quarter of the domestic economy.
- The ECB's heavy bond market interventions have compressed Greek bond yields beyond reason, and yet, this should help see Greece through to the other side where the grass is greener.
- A medium-term reduction in Greek equity risk premia, on the back of a global economic bounce-back, should see Greek equities perform better this year. I expect earnings yield differentials to tighten.
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GREK: Greek Equities Are Relatively Undervalued And Offer Upside Into 2021