Greek Banks Hit Fever Pitch on MSCI Upgrade Hopes as Trading Volumes Explode

A buying frenzy in Greek banking stocks continued unabated on Wednesday, with the sector accounting for a staggering 66.5% of the day’s total trading activity on the Athens Stock Exchange. Turnover in Alpha Bank, Eurobank, Piraeus Bank, and National Bank of Greece (NBG) reached €473.7 million out of a total market volume of €711.47 million.

The intense interest is largely driven by anticipation of the bourse’s potential upgrade to developed market status by MSCI. A digital roadshow for the four systemic banks, organized by Autonomous, drew 35 fund managers, predominantly from major investment houses like Capital Group and Wellington Management.

However, while new money flows in, some established institutional players are methodically trimming their positions. Brokers report that large portfolios such as Fidelity and Principal Financial Group have been reducing their exposure to Greek bank stocks, suggesting that current valuations have become demanding after a sharp rally that has seen gains of up to 29% this month alone.

Bank executives are watching the surge with some apprehension. While acknowledging that market movements are currently dictated by fund flows rather than fundamentals, they express concern that the influx of “hot money” ahead of the upgrade could erode the quality of their shareholder base and increase medium-term volatility.

A Morgan Stanley report has quantified the potential impact of an MSCI upgrade, estimating that the four banks would be the primary beneficiaries. The report projects net inflows of €287 million for NBG, €233 million for Eurobank, €208 million for Piraeus, and €196 million for Alpha Bank.

On Wednesday, Alpha Bank’s turnover soared to €160 million, a figure comparable to the entire market’s activity on a slow day in August. The stock continued its ascent, approaching €4.2, bringing its year-to-date gain to over 17%.

Eurobank followed with a turnover exceeding €127 million, climbing 2.5% to €4.328, buoyed by a Bank of America report naming it a top pick in Greece. Its shares are now up 26.3% since the start of the year. Piraeus Bank hit €8.77 on a turnover of €101 million, a daily gain of 2.4%, and is the year’s top performer with a nearly 30% rise. NBG saw a turnover of €85 million, correcting by 0.79% after a spectacular 6.6% jump the previous day.

Piraeus Bank also reached a historic milestone, closing at its highest-ever market capitalization of €10.9 billion, making it the fourth-largest company on the Greek stock exchange. The stock is listed as a top pick by every Greek brokerage that has published its recommendations.

Gold Shines, But Stocks Deliver Total Return

Recent market discussions have focused on gold’s outperformance against equities, even over decades. In the U.S., the precious metal has surpassed the S&P 500’s returns over a 25-year period.

A similar trend is visible in the Greek market. Since January 1, 2016, a low point for the Athens General Index (GD), the index has risen from 631 to 2,347 points, a return of 273%. Yet, an investment in the euro-denominated Xetra-Gold exchange-traded commodity (ETC) over the same period would have yielded nearly 329%.

The comparison shifts, however, when considering the GD’s total return, which includes dividends and capital returns. According to Investing.com data, the index’s total return over the same timeframe stands at 393%.

For investors considering gold today, analysts suggest it can coexist harmoniously with stocks in a diversified portfolio, particularly as a hedge in an environment of persistent inflation and low interest rates. Rather than buying physical gold sovereigns or bars, which carry high commissions, investors can access products like the Xetra-Gold (4GLD) ETC in Germany. This product, issued by Deutsche Börse Commodities GmbH, is 100% backed by physical gold and tracks its price in euros. Similar products are available on Euronext, including Amundi Physical Gold, WisdomTree Physical Gold ETC, and Invesco Physical Gold ETC.

Shipping Deals Signal Market Strength

In the shipping sector, shipowner Yannis Igglesis, head of JHI Steamship, is behind a rare all-Greek vessel transaction. JHI is selling one of its older tankers, the 2017-built LR1 “Aristarchos” (79,900 dwt), for approximately $44 million. The buyer is linked to Athens-based Spring Marine Management, an active player with a fleet of about 25 product tankers.

The sale price sets a new benchmark for this vessel type and age, confirming the upward trend in LR1 values. According to Clarksons, average prices for 10-year-old LR1s have risen by $5 million since mid-December to $40 million. The timing is ideal, with spot rates for 75,000 dwt product tankers exceeding $50,000 per day, levels not seen in nearly two years. The sale comes shortly after Igglesis signed a deal for three newbuild aframax and two suezmax tankers at South Korean shipyards.

Meanwhile, Samios Shipping, led by Thanasis Samios, has returned to the sale-and-purchase market for the first time since 2020. The company acquired the 2011-built bulk carrier “Vega Everest” (35,300 dwt) from Norway’s Vega Bulk Carriers. While the price was not disclosed, the vessel was marketed for between $9.2 million and $9.5 million. The acquisition expands the Samios fleet to five handysize and one panamax bulk carriers.

Political Tensions Flare Over Historical Grievance

On the political front, New Democracy parliamentary spokesman Makarios Lazaridis sparked outrage in PASOK and discomfort within his own party by launching a fierce attack on the late Prime Minister Kostas Simitis’s government over its handling of the 1996 Imia crisis. “That night you led the country to a questioning of our sovereign rights,” Lazaridis stated in parliament, adding that the Simitis government “gave Turkey the opportunity to talk about gray zones.”

The comments drew a sharp rebuke from PASOK leader Nikos Androulakis, but also caused visible awkwardness on the New Democracy benches. Prime Minister Kyriakos Mitsotakis has previously praised Simitis as a model of institutional and European statesmanship. Lazaridis’s motives remain unclear, with speculation split between a personal view and a strategic pivot to counter pressure from the right flank as national elections approach.