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Is the Greek Crisis Finally Over?

Tracey Ryniec
Record tourism and renewed optimism could mean investing opportunities in the Eurozone's most troubled member.
  • (1:00) - First Hand Look At Greece's Economics
  • (6:10) - Tourist Outlook On Greece
  • (9:20) - What Forms Of Payment Are Popular?
  • (12:00) - Foreign Property Investment
  • (15:40) - Is Greece Finally Turning Around?
  • (21:30) - Brexit Impact and Where to Invest
  • (27:15) - Episode Roundup: GREK, RCL, NCL, BEL, RYAAY, ICAGY, AAL
  •             Podcast@Zacks.com

Welcome to Episode #147 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Zacks intern Afree Mian and Zacks Product Manager Harry Kougias for the annual Market Edge podcast on Greece.

Harry is Greek, so he has volunteered to be Zacks resident expert on all things Greece. He also just recently returned from a summer on the mainland. He visits Greece every year and is glad to provide an update on the economic recovery going on there.  

Afree just recently took his first trip to Greece, so he has a tourist eye on all things Greece as he spent time on Naxos and Mykonos, just as the summer hordes were heading home.

What Economic Challenges Face Greece?

While its economy has improved, the unemployment rate still hovers around 20%, the highest in the European Union.

It also still faces brain drain from its top professionals who graduate college and then head to Germany, the Netherlands or other countries for more opportunities.

Additionally, there are still refugees coming into the country as a first stop towards a new life in Europe.

Can Tourism Save Greece?

2018 should be another record year for Greek tourism. In 2017, a record 27 million went to Greece prompting some locations, such as Santorini, to actually restrict the number of cruise ships that could dock on any given day. There was a fear of over tourism.

But 2018 is expected to see even more, as 32 million travelers are expected. For comparison purposes, the country saw just 15 million visitors in 2010.

Tourism is now big business and many new hotels and restaurants are opening as a result. But tourism is a mostly seasonal business, at least on most of the islands.

Can this be translated into year-round gains on the mainland?

How Investors Can Own a Piece of Greece

There aren’t many publicly traded Greek companies that are listed on the American exchanges. Therefore, investors have to use other means if they want to invest in Greece’s turnaround.

1.      The Global X Greek ETF GREK is the easiest way for investors to buy a piece of Greece. The top holdings are mostly banks and telecom. After rallying in 2017, the ETF has taken a dive in 2018 thanks to the weakness in emerging market stocks. It’s down 20.8% year-to-date. The ETF could be a deal for those looking to make some emerging markets bets.

2.      Investors could also invest in travel and leisure companies that are doing business in Greece such as Royal Caribbean RCL and Norwegian Cruise Line Holdings NCLH which operate many cruises in the Greek islands.

3.      Also look at the airlines. American Airlines AAL recently announced the first non-stop from Chicago to Athens in years. There is also non-stop Athens flights out of Newark on the Emirates. International Consolidated ICAGY operates British Airways, which has many flights into Greece and the islands.

No one has mentioned the “Greek Crisis” on Wall Street for quite some time. Yet, the pain of the budget and pension cuts still linger for the locals.  

What else should you know about Greece’s economic recovery?

Tune into this week’s podcast to find out.

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International Consolidated Airlines Group SA (ICAGY) : Free Stock Analysis Report
 
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
 
GLBL-X/F GREC20 (GREK): ETF Research Reports
 
Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
 
Norwegian Cruise Line Holdings Ltd. (NCLH) : Free Stock Analysis Report
 
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