When it comes to writing about the politics and economics of Greece, I have a difficult time staying away from my default, sarcasm. I will trying a different tact here, one emphasized by good news. Before I do that though, I first have to confirm that the economy is still in the doldrums, particularly the banking system.
In a recent speech at the United Nations, Greek Prime Minister Alexis Tsipras noted that his country’s economy appears to be healing after seven turbulent years. He added that the Greek people were all pulling together to show the world that after a 25% plunge in GDP growth, they are quite capable of emerging intact.
I am going to take them at their word, but I am also going to be a little harsh of the European Union for literally dumping the migrant problem on Greece’s doorstep and expecting them, with all their other problems, to deal with it. Tsipras mentioned that over one million migrants had wandered through their country over the last year, and that 60,000 remain because the borders with other neighboring countries have been closed. That in itself must put a considerable strain on an already fragile economy.
The Greek domiciled company FF Group (FFGRP:GA) should be on the watch list of most foreign investors, if not part of their portfolio. The company is in the retail sector, but what makes them particularly impressive is that they not only manufacture and sell articles under their own brand name, but have retail stores in airports, malls, and cruise ships all around the world. Not bad for a company that has been in business only since 1982.
Their stock, which is traded on the Athens Stock Exchange, is one of the few Greek stocks to have a positive return both YTD and one year. In fact, since September 30, 2012 the stock is up over 300%. Not bad if you take into consideration all that has happened to the Greek economy over those years.
I believe the Greek economy will eventually heal, but as far as a time frame I have no idea. Besides the mistakes made by the current government, there are outside influences such as the EU collapsing and the migrant issue that could severely change the calculus. It’s possible that Greece will come to regret not having left the Union when they had the chance.
Peter Kohli is the CEO of emerging market specialist DMS Funds.