Athens Stock Exchange: World champion in returns in 2025

As of last Thursday’s close, the Greek stock market is at the top of the global ranking for 2025 with 34.86% gains, followed by Seoul (+33.04%) and Warsaw (+32.56%).

The Athens Stock Exchange outperforms major European markets (DAX-30 +22.41%, FTSE-100 +9.78%, CAC-40 +5.98%), as well as Wall Street indices (Nasdaq +8.15%, S&P-500 +7.07%, Dow Jones +4.56%).

Despite its rise, the Greek stock market remains attractive when considering its market capitalization relative to Greece‘s GDP. Based on GDP projections of €240 billion for 2025, the stock market’s capitalization of €130 billion corresponds to just over 50% of GDP.

In a recent analysis, JP Morgan highlights that the balance of moderate returns and low risk justifies an overweight rating for the Greek stock market. Positive factors include capital returns from banks (with dividend yields of 10% and share buybacks) and a 2% growth rate. Additionally, Greek banks trade at a 20% discount based on P/E compared to European banks.

JP Morgan places Greece among countries with significant investment opportunities. It notes that Greece is less exposed to tariff risks, as tourism is its main export product. The Athens Stock Exchange is among the most attractive globally, as its capitalization equals 50% of GDP, compared to 70%, 80%, or even 100% elsewhere.

The firm emphasizes that the broad discount justifies outperformance.

For example, U.S. equities trade at a P/E above 21, whereas Greece holds a favorable relative position within Europe, with valuation multiples at 8.7x and a 31% discount relative to its long-term average and to European markets.

Goldman Sachs sets a target price of 2,100 points for the General Index (GD) and upgrades Greece to a key destination for international investors in emerging markets, citing strong returns and attractive valuations, particularly in the banking sector.

Greece’s forward P/E is below the emerging market average. The report highlights Eastern European banking, noting that Greek banks still have significant upside potential, despite their strong performance to date.

Goldman Sachs views Greece as one of the most attractive markets in the region, estimating a dividend yield of 5%, compared to 3% for emerging markets overall and 2% for European markets.

Optima Research maintains a positive outlook for the rest of 2025, stating that the Greek market remains attractive, especially in the current macroeconomic environment.

Corporate developments play a key role, with moves such as Unicredit’s involvement with Alpha Bank, Metlen with the LSE, and EURONEXT’s agreement with the ASE giving momentum. GDP growth of 2.2% in Q1, compared to just 0.6% for the EU average, is a supporting factor.

It notes that the P/E ratio has risen to 10, still 35% lower compared to major European markets. Net foreign inflows in H1 reached €454.6 million, while trading activity increased by 76.8%, with foreign investors accounting for 61.9% of activity.

The Banks

Despite their outperformance since the start of the year, both international and domestic investment firms continue to express confidence in Greek banks.

Goldman Sachs foresees continued growth for the sector, supported by strong capital adequacy ratios and a reduction in non-performing loans.

Greek banks are among the cheapest and most attractive in Europe, according to UBS.

Bank of America also sees significant upside for the shares of the four systemic Greek banks, as their valuations remain lower than the European average. Their valuations are below 7 times earnings, and the P/TBV ratio is below 1, whereas European banks trade higher.

The narrative of loan growth and high dividend yields is driving bank shares higher, according to Axia Research, which believes that despite global uncertainties, Greek banks are well-equipped to maintain their positive performance.

Eurobank Equities notes that, despite the rally, valuations remain undemanding. While recognizing rising geopolitical risks, it sees room for further growth through earnings upgrades and potential benefits from a possible upgrade of the Athens Stock Exchange to developed market status.

The analysis focuses on three main drivers:
– Positive Q1 results,
– Strategic acquisitions, and
– Favorable shareholder returns.

Alpha Finance believes that organic profitability remains strong, as robust credit expansion and positive fee income trends offset