J.P. Morgan sees STOXX upgrading Greek equities, nearly $1 billion inflows eyed

By Shashwat Chauhan and Johann M Cherian

Jan 7 (Reuters) - Wall Street brokerage J.P. Morgan expects European index provider STOXX to upgrade Greece to 'developed market' from 'emerging market' later this year, making Greek stocks eligible to join Europe's premier equity indexes.

The brokerage expects STOXX to conduct its country classification in the first quarter and announce the upgrade by April.

The changes could be implemented during STOXX's index review in the third quarter of 2026, J.P. Morgan said, making Athens stocks eligible to join the STOXX 600 .STOXX and Euro STOXX .STOXXE indexes.

STOXX did not immediately respond to a Reuters request for comment.

Overall, J.P. Morgan estimates that passive inflow into Greek equities will be about $962 million with banks like National Bank of Greece NBGr.AT, Eurobank EURBr.AT, Alpha Bank ACBr.AT and Piraeus Bank BOPr.AT expected to bring in the lion's share of inflows.

Greece's largest utility Public Power DEHr.AT and telecoms operator Hellenic Telecommunications OTEr.AT are other companies which J.P. Morgan expects to be included.

Other index providers FTSE Russell and S&P Dow Jones are also expected to include Greek equities in their developed market indexes in September. However, MSCI MSCI.N in its most recent review noted that Greece met the economic development criteria, but did not meet the size and liquidity persistence requirements.

J.P. Morgan expects MSCI to add Greece to its watch-list for upgrade in the 2026 market classification review.

Greece has made a steady recovery from a debt crisis that started in 2009 and almost saw it drop out of the euro zone before an international bailout. However, as a sign of its comeback, the government has been repaying bailout loans and debt ahead of schedule.

Its banks - which had to be bailed out during the crisis - are fully privatised again and some of them have also started paying dividends.

The Athens stock index .ATG logged its biggest annual gain since 2019 last year and has rallied more than 160% since 2021.

(Reporting by Shashwat Chauhan and Johann M Cherian in Bengaluru; Editing by Maju Samuel)

((Shashwat.Chauhan@thomsonreuters.com;))