At the beginning of the year, and subsequently, JP Morgan continuously expressed reservations regarding Athens' transition to a developed market, arguing that investors would ignore it due to the small number of companies in the MSCI Index and low market capitalizations. Indeed, JP Morgan cited PPC (Public Power Corporation) and the National Bank of Greece as characteristic examples, stating that the former would be ranked among the smallest companies in the European utility sector, while the National Bank would also have a low ranking among European banks.
The recent share capital increase of PPC, amounting to 4 billion euros, and the 18 billion euros in bids from foreign investors resoundingly refuted all estimates. The current market capitalization of the listed company, at 12.9 billion euros, its liquidity, and, above all, its investment plan in a sector (data centers) that will bring long-term revenue predictability, have drastically changed the outlook. Large investment and pension funds can no longer ignore consistent returns, and this applies not only to PPC but to a series of companies within and outside the MSCI Index.
Transfer of financing
And this change is significant because it originated from the markets themselves rather than through loan support. The financing of larger enterprises is already shifting from banks to the Euronext Athens stock exchange. The massive 4 billion euro share capital increase of PPC, as well as the upcoming 1 billion euro share capital increase of IPTO (ADMHE), signal the transfer of financing for large corporate investment programs from banks to the capital market or bond markets, benefiting banks, the energy sector, and energy security.
Greek systemic banks have funded and continue to fund PPC projects in Greece and abroad, but they could not lend 4 billion euros at once or collect 18 billion euros in bids. PPC, as a listed entity, possessed the characteristics for attracting international capital, namely high market capitalization, stock liquidity, an investment development plan, and, crucially, a track record of executing investments and commitments made in recent years. Furthermore, with the new capital, PPC saves significant financial costs previously paid for its international bonds. Today, with a one-off lower cost, it has the funds to dominate acquisitions abroad and in Greece, achieving higher returns than its borrowing cost.
However, the investments of both PPC and IPTO will support the energy projects already financed by banks. Without grid connections, and the revenue predictability of photovoltaics, wind farms, and storage projects, hundreds of investments would not generate the income needed to repay loans. Banks have now stopped financing projects not connected to the grid or lacking revenue, as such loans are automatically classified as non-performing loans.
Signs of acceleration in the transfer
Strict requirements from the SSM (Single Supervisory Mechanism) for banks, as well as a recent IMF observation (regarding the concentration of Greek bank loans in ten enterprises), are expected to accelerate the transfer of part of corporate financing from banks to other capital sources, such as stock exchanges and European capital markets.
The return of the Greek market to developed status (2027) and the participation of investors from larger "pools" of capital strengthen these efforts for new funding sources. Through this transfer, and with greater participation from European savers, the European Union hopes to reduce the gap with American markets, although bankers argue that the reasons for lower capitalizations in Europe are the prohibitions on capital transfers between European countries and multiple supervisory regulations.
Safe Bulkers' dual listing also has a "reverse" path
Meanwhile, the dual listing of shares of the Greek-interest shipping company Safe Bulkers in New York and Athens opens the way for creating a new sector on the Greek stock exchange that holds significant weight in GDP. Because Euronext also has a presence in markets like Oslo, where Greek-interest shipping companies are present, it is not excluded that new dual listings of shipping companies may emerge.
Furthermore, listed companies Viohalco and Titan had moved their headquarters and share trading to Euronext, and the interest regarding the former is whether it will proceed with expanding its free float. At the same time, the dual listing of foreign companies is not a one-way street. Groups such as Allwyn have expressed interest in trading their shares on a foreign market (London). Even before the arrival of the new shareholder, BYLOT had planned an entry into the New York market. A presence in the US and the United Kingdom increases the chances of achieving a dual listing.
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