Greek stock market joins world’s leading exchanges after debt crisis

The Greek stock market has joined the ranks of the world's leading exchanges following the country's recovery from its debt crisis. On Monday, FTSE Russell reclassified Greece's capital market from "advanced emerging" to "developed," signaling another step in the nation's progress. The Athens Stock Exchange reported that the upgrade represented a significant international recognition of the country's structural reforms and the positive impact of recent years' efforts.

As a result, 62 Greek stocks were moved out of FTSE's emerging-market benchmarks and into its developed-market indices.

The upgrade has drawn the attention of international investors, potentially exposing Greek equities to a broader pool of capital. Yianos Kontopoulos, CEO of the Athens Exchange Group, hailed the achievement as a "landmark" that could attract funds tracking developed-market indices and create new financing opportunities for listed companies. Simultaneously, index provider STOXX reclassified Greece as a developed market, allowing nine Greek companies to join the pan-European STOXX Europe 600.

The changes prompted index-tracking funds to adjust their portfolios before the new classifications took effect. Funds focusing on emerging-market indices had to sell Greek shares, while those tracking developed-market benchmarks had to purchase them. This trading took place during the Friday closing auction, resulting in a record €4.26 billion in shares traded, surpassing the previous record of €3.03 billion set in 2008.

However, the extent to which index-driven trading will lead to sustained foreign investment and increased liquidity in Greek shares remains to be seen.

Greece's stock market upgrade coincided with positive signs of confidence in the country's public finances. On Friday, Moody's upgraded Greece's sovereign rating from stable to positive, suggesting that an upgrade could follow if economic and fiscal improvements continue. Scope Ratings also raised Greece's rating from BBB to BBB+, with a stable outlook.

These decisions reflect stronger investor confidence and could help Greece borrow at lower rates. Finance Minister Kyriakos Pierakakis noted that the ratings decisions and the return to developed status demonstrated that Greece had become "more resilient and more credible." However, he emphasized that the country must continue pursuing fiscal discipline, investment, and reforms aimed at boosting productivity and wages.