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With the creditors of Greece agreeing to release bailout funds worth €7.5 billion in June, the country’s government has already turned its attention to a host of reforms that it must undertake to keep the bailout funds coming in. Greece has already enforced most of the reforms required under its third bailout, which has boosted investor confidence and improved the chances of the country gaining access to the financial markets (read: Greek Woes to Impact Brexit? ETFs in Focus).
To secure the next tranche of funds worth €2.8 billion several measures need to be taken by October including the liberalization of the natural gas market and the privatization of the power grid operator ADMIE. Under the terms of the third bailout, Greece has promised to sell up to 24% of ADMIE, a grid of more than 11,000 kilometers of high-voltage power cables. Currently ADMIE is owned by the public power utility PPC.
Greece’s financial condition has time and again grabbed the limelight. Last year, Greece was on the brink of a default only to be saved by a multi-billion-euro bailout by the EU and IMF. This allowed the country to avoid bankruptcy and stay in the Euro zone. Last month, Greece’s creditors agreed on an extensive deal to provide €10.3 billion in bailout funds. Meanwhile, the creditors decided to ease Greece’s €321 billion debt burden by extending loan maturities, reducing interest rates and delaying payments (read: Debt Restructuring Puts Greece ETF in Focus).
Challenges Remain
The government of Greece has its work cut out for it. The IMF has raised doubts on the country’s ability to undertake the far-reaching economic reforms that it requires. The IMF stated that even if Greece manages to achieve a “surplus close to 3.5% of GDP” temporarily, only a handful of countries have managed to sustain such levels over a period of 10 years or more.
Greece’s national debt and an ever-higher bill for servicing its rising debts are definitely a concern, but several analyst believe that the country will return to growth this year after many years of recession.
In this scenario, we highlight a Greek ETF which is likely to be on investors’ radar in the coming days (see: all the European Equity ETFs here).
The fund tracks the MSCI All Greece Select 25/50 Index and provides exposure to the largest and most liquid companies in Greece. It has a small basket of 33 companies. The fund trades in average daily volumes of around 462,000 shares. It is heavily concentrated in the top two firms holding nearly one fourth of total assets.
Financials takes the top spot in terms of sector holdings, followed by energy, consumer cyclical and telecom. The product has AUM of $253.9 million and charges 63 bps in fees per year from investors. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook. The Greece ETF gained about 2.17% in the last three months (read: Surprise ETF Winners & Losers Post ECB Easing).
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Will Greek Reforms Boost GREK ETF?
With the creditors of Greece agreeing to release bailout funds worth €7.5 billion in June, the country’s government has already turned its attention to a host of reforms that it must undertake to keep the bailout funds coming in. Greece has already enforced most of the reforms required under its third bailout, which has boosted investor confidence and improved the chances of the country gaining access to the financial markets (read: Greek Woes to Impact Brexit? ETFs in Focus).
To secure the next tranche of funds worth €2.8 billion several measures need to be taken by October including the liberalization of the natural gas market and the privatization of the power grid operator ADMIE. Under the terms of the third bailout, Greece has promised to sell up to 24% of ADMIE, a grid of more than 11,000 kilometers of high-voltage power cables. Currently ADMIE is owned by the public power utility PPC.
Greece’s financial condition has time and again grabbed the limelight. Last year, Greece was on the brink of a default only to be saved by a multi-billion-euro bailout by the EU and IMF. This allowed the country to avoid bankruptcy and stay in the Euro zone. Last month, Greece’s creditors agreed on an extensive deal to provide €10.3 billion in bailout funds. Meanwhile, the creditors decided to ease Greece’s €321 billion debt burden by extending loan maturities, reducing interest rates and delaying payments (read: Debt Restructuring Puts Greece ETF in Focus).
Challenges Remain
The government of Greece has its work cut out for it. The IMF has raised doubts on the country’s ability to undertake the far-reaching economic reforms that it requires. The IMF stated that even if Greece manages to achieve a “surplus close to 3.5% of GDP” temporarily, only a handful of countries have managed to sustain such levels over a period of 10 years or more.
Greece’s national debt and an ever-higher bill for servicing its rising debts are definitely a concern, but several analyst believe that the country will return to growth this year after many years of recession.
In this scenario, we highlight a Greek ETF which is likely to be on investors’ radar in the coming days (see: all the European Equity ETFs here).
Global X MSCI Greece ETF (GREK - Free Report)
The fund tracks the MSCI All Greece Select 25/50 Index and provides exposure to the largest and most liquid companies in Greece. It has a small basket of 33 companies. The fund trades in average daily volumes of around 462,000 shares. It is heavily concentrated in the top two firms holding nearly one fourth of total assets.
Financials takes the top spot in terms of sector holdings, followed by energy, consumer cyclical and telecom. The product has AUM of $253.9 million and charges 63 bps in fees per year from investors. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook. The Greece ETF gained about 2.17% in the last three months (read: Surprise ETF Winners & Losers Post ECB Easing).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>