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Greek Minister of National Economy and Finance, Kyriakos Pierrakakis, described the acquisition of the Athens Stock Exchange by the European stock market group Euronext as “one of the largest foreign investments in recent years”.

“For the Greek economy as a whole, this is a decisive step forward,” Pierrakakis said from the floor of the Parliament.

The announcement of the all-share deal came on Thursday, with the offer worth €412.8 million. The deal will exchange 20 Athens Exchange ordinary shares, valued at €7.14 each, for one new Euronext share, worth €142.70 based on a 30 July closing price.

“[This investment] strengthens our credibility and upgrades the country’s position on the European and international economic map,” continued Pierrakakis.

“We will examine the details of the agreement and follow the progress of its implementation. Overall, this is a highly positive development, and undoubtedly a major opportunity for the country as a whole.”

And the acquisition of the Athens Stock Exchange was not only welcomed with satisfaction by Greece’s Minister of Finance.

Euronext CEO Stéphane Boujnah commented that “Euronext aims to expand its geographical footprint in Greece and to create a financial centre of Southeast Europe through the Athens Stock Exchange”.

Boujnah added: “Greece has experienced strong economic growth in recent years, supported by increasing investment, the cultivation of international confidence and strong economic indicators. This is the right time, the proper moment to invest in Greece.”

What it means for Greek businesses

The integration of the Greek stock exchange into Euronext’s European family opens a new gateway to financing for Greek companies, at a critical time when international competition is increasing and global trade is being redefined.

Euronext is the largest liquidity pool in Europe, managing around 25% of total cash equity trading activity. It operates capital markets in major financial centres such as Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo and Paris.

It brings the following to Greece:

Access to a wider investment base

Membership of a pan-European group offers Greek businesses direct exposure to a much larger network of international investors, both institutional and private. This translates into increased liquidity for their shares and greater chances of success in future capital raises or bond issuances.

Know-how and digital tools

Euronext has well-developed digital platforms, trading tools and compliance infrastructure that will support the technological modernisation of the Greek stock exchange. This will help more firms and investors to participate in the ecosystem.

Enhancing credibility and prestige

Participation in a network with a strong European presence could act as a “seal of credibility” for listed Greek companies, making them more attractive to foreign investors.

Easier access for SMEs

Euronext’s focus on small and medium-sized enterprises (SMEs), through initiatives such as the ‘Euronext Growth’ programme, could lead to the development of simpler and less expensive listing procedures for Greek SMEs.

Interconnection with other capital ecosystems

Through Euronext, Greek companies will gain access to alternative financing tools such as green bonds, ESG ratings, dividend reinvestment programmes.

What it means for the Greek economy

The acquisition of the Greek stock exchange comes at an important juncture for the Greek economy, which continues to record significant GDP growth (2.3% in 2024), yet faces serious challenges.

The main challenges include the completion of the Resilience and Recovery Fund, the looming recession threatening the European economy, and the need to change the country’s production model, with less reliance on services such as tourism.

Greek businesses need sources of funding in order to develop beyond the Greek market, which is small and showing signs of fatigue in terms of domestic consumption.

Furthermore, despite the impressive increase in foreign direct investment over the last five years, the country still suffers from a large investment gap, hindering the modernisation of the Greek economy.

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Israel’s attack on Iranian nuclear and military targets caused the price of oil to surge more than 7% on Friday since Tehran is one of the world’s major producers of oil, despite sanctions by Western countries limiting its sales.

A wider war could slow the flow of Iranian oil to its customers and keep prices of crude and gasoline higher for everyone worldwide. But early Monday, those concerns appeared to abate slightly.

Oil prices were still volatile on the fourth day of the Israeli-Iran crisis, before giving back a bit of their gains. On Monday morning, the US benchmark crude oil was traded at $73.71 per barrel. Brent crude, the international standard, cost $74 per barrel, down from Friday but still 7% higher than the price before the missile fire started. 

Military strikes between Israel and Iran are fuelling concerns that oil exports from the Middle East could be significantly disrupted. However, there is currently no indication that the oil flow is impacted, and concerns are running high.

Meanwhile, major oil companies are being rewarded on the stock market: BP and Shell both gained more than 1% in the Monday morning trade in Europe. 

“Gains in oil majors and defence contractors have helped to push the FTSE 100 onto a positive footing in early trade,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown financial services company.

Shares in the FTSE 100’s top banks were also rising on inflation fears that could result in higher key interest rates. Standard Chartered rose nearly 3%, Barclays and Natwest were up by more than 1% by 11 am CEST. 

Also strengthening the banking sector’s gains in London, Metro Bank shares soared by more than 14% following speculation that investment firm Pollen Street Capital would take over the lender, Sky News first reported over the weekend.

Investors in London also gained confidence after data for May showed a 6.1% year-on-year jump in retail sales in China, the world’s second biggest economy. However, it was coupled with lower-than-expected growth in industrial output, which still rose 5.8% from the previous year.

After 11 am in Europe, Britain’s FTSE 100 inched up 0.3% to 8,876.26. Germany’s DAX gained 0.2% to 23,572.39 and the CAC 40 in Paris edged 0.6% higher to 7,728.66. 

The futures for the S&P 500 and the Dow Jones Industrial Average were up 0.5%.

During Asian trading, Tokyo’s Nikkei 225 added 1.3% to 38,311.33, while the Kospi in Seoul gained 1.8% to 2,946.66.

Hong Kong’s Hang Seng surged 0.7% to 24,060.99 and the Shanghai Composite Index added 0.4% to 3,388.73.

The price of gold has climbed as it remains a safe haven asset. An ounce of gold added 1.4% on Friday, but gave back some of its gains on Monday morning, and was traded at around $3,437 an ounce.

Prices for US Treasury bonds are also on the rise when investors are feeling nervous, but Treasury prices fell Friday, which in turn pushed up their yields, in part because of worries that a spike in oil prices could drive inflation higher.

Inflation in the US has remained relatively tame recently, and it’s near the Federal Reserve’s target of 2%. However, concerns remain high that it could accelerate due to President Donald Trump’s tariffs.

A better-than-expected report Friday on sentiment among US consumers also helped drive yields higher. The preliminary report from the University of Michigan stated that sentiment improved for the first time in six months after Trump put many of his tariffs on pause, while US consumers’ expectations for future inflation eased.

In currency trading early Monday, the US dollar gained to 144.18 Japanese yen from 144.03 yen. The euro rose to $1.1582 from $1.1533.

What is expected for the week?

The Middle East conflict is set to be the focus of the G7 meeting of leaders of wealthy nations in Canada this week.

There are also hopes that Trump will sign more trade deals, which keeps trade optimism a bit higher.

“It’s a big week in terms of decisions on interest rates and the direction of monetary policy,” Streeter said.

“The Federal Reserve is expected to keep rates on hold this week but comments from chair Jerome Powell will be closely watched for future direction of policy.”

Meanwhile, there is a monetary policy meeting of the Bank of England this week, where “policymakers are expected to press pause on rate cuts,” Streeter explained, citing the potential impact of higher energy costs. 

Meanwhile, the UK government’s infrastructure plans are going to be revealed in more detail this week. “The 10-year strategy, worth £725 billion (€850.8 bn), is the backbone of the Starmer administration’s plan to kickstart growth,” Streeter said.

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Following a broad weekly rally on Wall Street amid a de-escalation in the US-China trade war, risk-off sentiment once again prevailed in global markets following a major downgrade of US credit ratings by Moody’s. Global equity indices fell during Monday’s Asian session as sell-offs in US assets resumed, with US stock futures, the dollar, and government bonds all declining.

Moody’s downgrades US credit ratings

On Friday, Moody’s Ratings, a major American credit rating agency, downgraded the “US long-term issuer and senior unsecured ratings” to Aa1 from the top-tier Aaa due to mounting concerns over rising government debt and widening fiscal deficits.

The agency stated: “Over more than a decade, US federal debt has risen sharply due to continuous fiscal deficits. During that time, federal spending has increased while tax cuts have reduced government revenues. As deficits and debt have grown, and interest rates have risen, interest payments on government debt have increased markedly.”

Moody’s downgrade followed similar moves by rival agencies: Standard & Poor’s cut its US sovereign credit rating to AA+ in 2011, and Fitch Ratings made the same downgrade in 2023.

The decision led to a rise in US government bond yields as investors demanded a higher premium to compensate for perceived risks. The 10-year Treasury yield rose by 5 basis points (1 basis point = 0.01 percentage point) to 4.48% on Friday, climbing further to 4.51% during Monday’s Asian session. The downgrade also appeared to dampen investor appetite for other US assets, including equities and the dollar.

Moody’s expects federal budget flexibility to remain “limited” without adjustments to taxation and government spending. The agency projected that the US deficit would expand by approximately $4 trillion (€3.58 trillion) over the next decade if the 2017 Tax Cuts and Jobs Act is extended. “Federal interest payments are likely to absorb around 30% of revenue by 2035, up from about 18% in 2024 and 9% in 2021,” Moody’s added.

“It does speak to a level of market risk in US debt, which is to say that the value of US bonds could be compromised if the economy can no longer run at the growth rates necessary to service the government’s liabilities,” Kyle Rodda, senior market analyst at Capital.com in Australia, said.

Risk-off sentiment prevails

US equity futures fell sharply during Monday’s Asian session following Moody’s downgrade. As of 4:42 am CEST, futures on the Dow Jones Industrial Average were down 0.65%, the S&P 500 dropped 0.92%, and the Nasdaq Composite declined by 1.22%.

Asian equities also came under pressure amid the risk-off tone. Japan’s Nikkei 225 dropped 0.66%, Australia’s ASX 200 declined 0.46%, and Hong Kong’s Hang Seng Index slid 0.56% during the same period.

The ripple effect is expected to spill into European markets, though major indices such as the Euro Stoxx 600 and the DAX were set to open flat.

The US dollar also weakened against other G10 currencies, particularly safe-haven currencies including the euro, the Japanese yen, and the Swiss franc. Gold prices rose amid increased haven demand, although the yellow metal pulled back from an intraday high, likely due to pressure from rising US bond yields. Gold futures initially surged over 1% before retreating and were 0.8% higher, trading at $3,213 per ounce as of 4:12 am CEST.

Despite market jitters, Rodda believes the impact of Moody’s move will be short-lived. “I don’t think it will have a lasting impact,” he said, although he views the downgrade as “a reminder of the very loose fiscal policy the US is running and the structural problems related to US public finance.”