Help for Greece Moves Investors in the Right Mood to Buy

Investment24 Research hints at a potential domino effect

Baech (Switzerland), April 15, 2010 – Last weekend the Finance Ministers of the EU Member States and the International Monetary Fund (IMF) came to the agreement to support Greece financially after disputes lasting for weeks. For a fairly long time the Mediterranean State has it’s back up against the wall because of budgetary misgovernment during the last years. The announcement of the multi-billion bail-out plan initially caused further stock price gains on Monday (April, 12).

After the start of the trading the DAX increased to 6,285 points and thus reached the level of September 2008. “The German leading share index lastly reached this mark before the bankruptcy of Lehman Brothers. Hence, at the stock exchange the worst seems to be overcome at first glance“, declares Bernd M. Otto, CEO of Investment24 AG. The Euro exchange rate could also gain strengh. The European single currency recovered temporarily to 1.3692 US-Dollar, after it had reached a low at 1.3267 US-Dollar a few days ago. At the same time the risk premium for Greek ten year public bonds lowered compared to German federal savings bonds. The risk premium for credit default swaps, which function like an insurance against a Greek bond default, diminished strongly.

The reason for this positive development on the stock markets was the notification of the Finance Ministers of the Euro-zone to support Greece within the first year with up to 30 billion Euro, providing three year loans with an interest rate of about five percent – thus a price considerably below the market. In addition the IMF will also help the financially stricken State. Therefore Greece can revert to help up to 45 billion Euro. “This is more than the overall borrowing requirement for this year“, states Bernd M. Otto from Investment24 Research and adds: “Despite the bail-out caution is advised. On the one hand the bail-out plan is not unexpected, on the other hand long-term the issues will be negative“.

Motivated by the Greek bail-out, other countries could also take the bait to shift the responsibility for the own misgovernment on to the other EU Member States. “The decision to support Greece financially makes it quasi impossible to refuse support for Spain and other EU countries“, comments Bernd M. Otto. Consequently the danger that the Euro exchange rate will soon be under pressure again is still dominant.

About Investment24:
Investment24 AG, based in Switzerland, provides quality information about interesting opportunities on world stock markets. The company not only demonstrates a positive performance in excess of 350 percent since July 2007, but it also offers a high degree of transparency. This is in sharp contrast to other stock market or financial services newsletters. All transactions are explained in detail, and are provided with background information. These results are achieved with professional risk and money management. CEO and editor of the stock market letter is Bernd M. Otto, supported by experienced staff.
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This release was published on openPR.