The Global X FTSE Greece 20 ETF (NYSEArca: GREK) is back above its 200-day simple moving average. The country has been rebounding recently as the S&P 500 is rising to a new all-time high.
Shares in the Greek ETF GREK gained around 7% earlier in the week, and the ETF has managed to remain in the same range over the past few days. The country remains in high debt, has a high unemployment rate and prospects are bleak for a rebound anytime in the near future. Despite the negative factors, investors have been more optimistic about the country, likely due to positive sentiment for the Eurozone. [Spain, Greece ETFs Back pedal on Protests]
Eric Dutram for Zacks reports that the recent reversal in the trend for GREK is also a result of the country’s biggest banks gaining strength as they avoid nationalization, and merging, and find ways of re-capitalization. Financials make up about 16% of the portfolio in GREK. Consumer staples and the consumer discretionary sectors make up about half of the portfolio, which could be disheartening since the Greek consumer is weak overall.
Greece is facing another year of recession, as the European Commission forecasts a contraction of 4.4%. Tom Stoukas for Bloomberg reports that the Finance Ministry reported on April 8 that a 4.5% drop is expected in GDP. [iShares: The Real Worry in Europe]
““We’re not expecting more solid signs of improvement until the second quarter of this year, when tourism activity is expected to provide more support to the labor market,” Nicholas Magginas of National Bank of Greece said. [Greece ETF Rises on S&P Credit Upgrade]
Greece’s stock market fell hard in March but is rebounding for the time being. The overall improved sentiment on the European debt crisis is also behind the recent trend reversal.
Global X FTSE Greece 20 ETF
Tisha Guerrero contributed to this article.