Opportunity opens for new Greek government bond issues

Subject Greek debt’s improving attractiveness. Significance Although declining government bond yields reflect a gradual reduction in Greek credit risk, the pace of reduction seems to be driven more by recent developments in global capital markets and higher investor risk appetite, than any significant improvement in economic fundamentals. Impacts Lower yields on government debt will pave the way for a surge in corporate issues to lock in lower interest rates and extend debt maturity. Improved foreign and domestic investor sentiment is leading to a rise in the Athens Stock Exchange general index. Regular GGB issuances will support liquidity in the secondary market.

Brexit will further destabilise weak Greek economy

Subject Economic uncertainty in Greece after Brexit. Significance The extent of the damage to economies can only be assessed once the EU and United Kingdom agree on the exit strategy and rules for future economic cooperation. However, some immediate negative consequences for Greece are already visible, in increased volatility in financial markets, widening Greek government bond yields and a fall in the market capitalisation of the four major Greek banks. Impacts Brexit will require speedier resolution of Greece's third bailout negotiations, possibly making lenders more lenient to the Greek position. Yet if it turns the EU towards greater convergence, it might toughen lenders' stance on economic and structural reforms in Greece. A Brexit-induced revision of EU migration policy could funnel more financial aid to Greece as an EU immigration hub. Greece will not join any new wave of domestic Euroscepticism, as EU funds are a lifeline for the Greek economy. Nor is Brexit likely to strengthen Greece's far right; historical and social factors make society relatively open to migrants and refugees.

How Firm and Market Characteristics Affect Profitability

This study aims to assess the impact of specific corporate and market features on the profitability of firms. More precisely, the variables examined for the purposes of this study are firms' size, financial leverage, accruals, volatility of profitability, growth rate of the Greek economy, the 10-year Greek government bond yield, and the Greek sovereign debt crisis. The empirical results exhibit an average profitability of 10.71%, which varies significantly both between firms and during the time period examined. Another finding of this study is the verification of the theoretical relationship between the above variables and Greek firms' profitability between 2004 and 2012. Whereas variables such as firms' size, volatility of profitability and accruals do not seem to affect firms' profitability in a statistically significant way, the signs of the coefficients are consistent with those found the literature review.