Societe Generale Says Greek Stock Market Appealing

The Greek stock market, along with those of Spain and Italy are appealing investment choices, according to Societe Generale (SoGen).

The French multinational bank and financial services company firm highlights notable differences in equity risk premiums between Eurozone core and peripheral countries.

According to the bank, in Germany and other core Eurozone nations, the equity risk premium has either remained stable or close to historical levels (often near the lower bound). This trend suggests a preference for bonds over stocks or a more balanced asset allocation.

Conversely, in peripheral countries such as Spain, Italy, and Portugal, equity risk premiums are more “stretched,” with real values approaching historic highs. This indicates a stronger preference for stocks over bonds in these markets.

Moreover, earnings expectations, as reflected in the 12-month forward earnings per share (EPS), appear more attractive for peripheral markets, particularly Greece, Spain, and Italy. Given this data, Societe Generale advises investors to take a buying position in peripheral stocks over core stocks, as growth potential and returns seem more favorable.