Is It Time To Buy Greece?
Cam Hui | Feb 19, 2015 11:40PM ET
The news from Germany sounded dire for Greece, according to this Bloomberg (emphasis added) yesterday:
While the euro lost 0.1 percent, Greek bonds rose, with the yield on the 3-Year down 28 basis points at 17.09 percent at 5:33 p.m. in Athens. That compares with a record 128 percent in March 2012. Greek stocks advanced for a second day, with the Athens Stock Exchange benchmark up 1.1 percent.An index of Greek debt known as the Bloomberg Greece Sovereign Bond Index also shows confidence remains well above the worst levels of pessimism during the past five years. The current value of 90.05 is five times the low of 17.45 June 1, 2012. The gauge peaked at 118.9 in August.
A longer term chart of the Athens General-Composite and the US Greek ETF (NYSE:GREK) also tells a similar story. Greek stocks look washed out, especially when they don't react negatively to bad news.
A closer look at the 30 minute tick relative performance chart of GREK compared to FEZ, the Euro STOXX 50 ETF, shows that Greek stocks have been in a relative uptrend against eurozone stocks since the end of January. When the news hit the tape of the German rejection of the latest Greek proposal, the relative performance chart barely budged.
This kind of market action yesterday tells me that unless catastrophe were to occur, such as a Greek default or Greek exit from the eurozone, pretty much all the bad news is in Greek stocks and bonds. If you want to bottom fish, you may think about buying Greek paper, either in its debt or equities, as a speculative buy at these levels.
Disclaimer: None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.
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