The Athens Stock Market’s moves are focused on S&P’s announcement regarding the Greek economy on Friday night, after the closing of Wall Street. More specifically, eyes are turned on whether the rating agency will upgrade the Greek economy to investment grade.
JP Morgan and Citigroup estimated that Greece will receive the investment grade status from S&P.
The verdict of the US rating agency is considered critical for the Stock Market, which has lost ground in October, since in the first 11 meetings of the month, six have closed with losses. In the same period, the General Index fell by 2.95% and the capitalization was reduced by 1.54 billion euros.
However, it should be noted that the upgrade of the Greek economy by DBRS to investment grade at the beginning of September did not have any positive effect on the Stock Market.
Meanwhile, JP Morgan estimated that S&P will likely upgrade the Greek economy to investment grade this Friday, while it sees a risk of downgrading Italy’s outlook. At the same time, it estimated that Fitch will also upgrade Greece to investment grade in December.
As the rating agency pointed out, Greece was already upgraded to investment grade (IG) by DBRS on September 8. However, according to the rules of Eurozone bond indices monitored by investors, an IG rating from at least two of the three major rating agencies (S&P, Moody’s and Fitch) is required for Greek bonds to be included in some of these indices.
Therefore, Fitch’s rating for Greece (currently ‘BB+’ with a stable outlook, i.e. one notch below investment grade) on December 1 will be critical. “We expect that Fitch will also upgrade Greece to investment grade on December 1,” JP Morgan said.
