In its market review today, investment house Excellence says that events in Greece should not have any direct impact on the Israeli economy. Excellence adds however, "Any significant deterioration in the financial markets leading to economic damage in the Eurozone, Israel's main trading partner, will harm the local economy, especially given the sharp appreciation of the shekel against the euro in the past few months."
On what lies in store for Greece and the EU, UBS Global Chief Investment Officer Mark Haefele sees the chances of Greece remaining in the Eurozone as having suffered a setback from the vote by the Greek public against the creditors' demands. Haefele nevertheless sees the damage as containable, and European equities as a good longer term bet.
"We expect a near-term sell-off in Eurozone equities as events unfold. However, we believe that an overweight position in Eurozone equities is still warranted over our tactical 6- month horizon. We believe that the European Central Bank (ECB) will be able to mitigate contagion if necessary," Haefele writes.
Barclays also sees a Greek exit from the euro as much more likely now. Barclays says that July 20 will be a critical date for Greece, since on that day it is due to make a €3.5 billion loan payment to the European Central Bank, and if it fails to do so, the European Central Bank will shut down support for Greek banks, which will mean a collapse of the Greek financial system, forcing the Greek government to print a new currency in breach of European Monetary Union rules. It will then in effect leave the Eurozone.
Published by Globes [online], Israel business news - www.globes-online.com - on July 6, 2015
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