For the time being JP Morgan remains “neutral” regarding Greek bonds and awaits the electoral results on Sunday, while its top choices amongst Greece-based listed companies are again National Bank of Greece and and OTE, the biggest telecoms operator in the country.
According to the investment house, renewed speculation over a possible “Grexit” affected Greek bonds, as markets anticipate a 62% chance of default in the CDS, whereas the spread on Greek bonds jumped over 10% and the banks negotiate with a p / bv (share price with the accounting value) of 0.55.
However, according to JP Morgan, 2014 was a very good year for Greece, given that the banking sector was normalised and GDP posted a small increase (yoy) in the second half of 2014 — developmetns that ostensibly laid the foundation for long-term recovery and more robust stock market yields.
All eyes on the upcoming election, with JP Morgan projecting a SYRIZA plurality but not a big enough majority to form a single-party government. The financial giant added that SYRIZA will need to form a coalition government and will remain in the euro, but on close watch.
Furthermore, JP Morgan notes the fact that in the last six months Greece has increased its variability by 40% over Russia.
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