EFG Eurobank Ergasias SA ADR (EGFEY)

[Enterprising Investor]

Greece: Debt Talks Fuel Rally In Bank Stocks, GREK ETF (5/09/16)

By Dimitra DeFotis

Discussion about cutting the Greek debt burden at an extraordinary meeting between Greece and its Eurozone creditors helped the Global X MSCI Greece exchange-traded fund (GREK) rise nearly 3% Monday.

Greek bank stocks Alpha Bank (ALBKY), Piraeus Bank (BPIRF), National Bank of Greece (NBGGY) and Eurobank Ergasias (EGFEY) rallied on the positive news. Greek banks got the thumbs up from investor Richard Deitz of VR Capital Group at the Sohn Investment Conference last week.

Things looked more bleak over the weekend, when Greeks took to the streets in front of the parliament building in Athens and unions declared a general strike to show displeasure over more potential pension and other cuts. The Eurogroup is still demanding more austerity contingencies if Greece cannot meet its bailout targets. The risk is that Greece won’t be able to meet its debt obligations in July without an agreement — it needs another release of funds from creditors. For now, Greece won’t have to vote specific measures into law, The Guardian reports.

That was a best-case scenario to come out of the meeting that just ended, according to a note from Wolfango Piccoli at Teneo Intelligence written Friday. He added:

“While our baseline scenario (65% likelihood) remains that an eventual deal is the most likely outcome as it should be possible to reach a compromise on the contingency package that works for both sides, the timeline remains unclear. The risk of snap polls could increase significantly if the lenders decide to play hardball by insisting on a contingency package that Tsipras cannot either accept or get approved in parliament. The Eurogroup meeting scheduled for 24 May could offer the next opportunity for a deal.”

http://blogs.barrons.com/emergingmarketsdaily/2016/05/09/greece-debt-relief-talks-fuel-stock-grek-etf-rally/?mod=BOL_hp_blog_stw