Sep 14th, 2015, Greece's top two candidates face off in TV debate tonight, amid downgrade of local bourse

·         with just 7 days until Greeks head to the polls, the leaders of top two political parties battled it out on the small screen, in an effort to win undecided votes.

·         new polls show a neck-and-neck battle between SYRIZA (left) and New Democracy (centre right). The 4 out 5 polls showed a narrow lead of SYRIZA vs. New Democracy, which fluctuates between 0% - 1.2%. More specifically:

1.       Public Issue’s poll, which was published in SYRIZA’s newspaper ‘Avgi of Sunday’ showed both rivals to be equals at 31%, with PASOK keeping the 3^rd position at 8%, and an 8 party parliament. The former Tsipras’ ally ‘Independent Greeks’ (nationalists) don’t manage to surpass the threshold of 3% and enter next parliament.

2.       Kappa Research’s poll, which was published in the newspaper ‘Vima of Sunday’ showed a narrow lead of SYRIZA of 0.5%, with Golden Dawn (neo Nazi) following at 3^rd position with 7%, and a 9 party parliament.

3.       Pulse RC ‘s poll, which was published in the newspaper ‘To Pontiki’ showed both SYRIZA and New Democracy to be equals at 26.5%, with ‘Golden Dawn’ following at 6.5% and an 8-pary parliament.

4.       Palmos Analysis’ poll, which was published in ‘tvxs TV’ showed that SYRIZA increased its lead vs. New Democracy to 1.2%, with Golden Dawn (neo Nazi) following at 3^rd position, and a 7 party parliament.

5.       ALCO’s poll, which was published in the newspaper ‘Proto Thema’ showed a narrow lead of SYRIZA of 0.7%, with Golden Dawn (neo Nazi) following at 3^rd position with 6.4% and an 8 party parliament.

 

·          FTSE announced that effective March 1^st 2016, Greece’s bourse will be downgraded from ‘developed markets’ to ‘advanced emerging markets’. The downgrade is attributed to the implementation of capital controls due to political instability, which resulted to a) a five weeks closure during summer, b) extremely low trading volume.

·         As a result of 13,000 arrivals of refugees in Munich last Saturday, Germany temporarily re-imposed borders’ controls and halted train routes from Austria, as of Sunday afternoon. An emergency meeting of EU-28 member states’ interior ministers will take place today, where there will be a discussion regarding the redistribution of 160,000 asylum seekers and EU’s common policy on this matter.

Risk assessment. All published polls show that there will be a neck-and-neck battle. This is due to the so called ‘undefined vote’ represents a significant portion of polls’ responses (Public Issue’s poll recorded the ‘undefined vote’ at 26%).

Needless to say that the final preference/participation of undecided voters will determine elections’ final outcome. These voters voted mainly SYRIZA last January, but today either remain undecided or have changed their preference. In an effort to attract the undecided voters, both parties having been using TV spots with positive messages. Last but not least, tonight’s TV debate will play significant role as regards the final preference of undecided voters.   

After 14 years in FTSE advanced markets group of bourse, Greece will return to emerging markets. It will be a rare case of bourse, as Greece’s will be included in emerging markets while maintaining the currency stability of euro. Although the local bourse’s downgrade reflects economy’s significant contraction and political instability, the combination of emerging market status with euro, could be a profitable proposition as regards the emerging markets investment funds.

With Germany and other Central European countries re-imposing borders controls due to refugees’ influx, a) this may alter the Schengen Treaty, which is a major component of euro project and b) Balkan states (including Greece) will be facing increasing pressure.

The recent developments have further increased Greece’s geopolitical role because Greece's borders simultaneously represent Europe's ones. The latter increase pressure to local political system, to form a strong government ASAP, not

only to deal with significant economic challenges but to deal with refugees’ crisis, within European context, as well.