Beneficiaries of a Grexit?

[Tyler Durden]

Just wondering, who or what or what companies would benefit from a Grexit?

 

[young-gun]

Anyone who can predict such companies is doing very well in my opinion(if there is any). A Greek exit would put the global economy into unchartered waters, the outcomes could range from not so bad to catastrophic in my opinion, others may have a better idea how events may unfold.

 

[Tyler Durden]

I found this via Google, although I was looking for a more 'local' result:

Inevitably, there are a few winners from Greece's woes.

On Monday, De La Rue, the banknote printer, saw its shares shoot up after the chief executive, Tim Cobbold, said the crisis "can create opportunities for us", possibly through printing drachma notes if the currency was reintroduced. The next day, Nick Buckles, the chief executive of G4S, said his security company's cash-handling operation, which does a lot of work for Greece, would benefit if it left the euro and re-adopted the drachma.

"Basically we would be involved in the whole roll-out of the currency," Mr Buckles said. Yesterday, Euromoney, the financial arm of Daily Mail & General Trust, added itselfto the list of potential Grexit beneficiaries.

Colin Jones, the group's finance director, said: "Volatility of currencies is not a bad thing. It's probably another conference we want to run or something like that... making money from adversity."

As if to underline the casino-like aspect of the Greek meltdown, the growing odds of a Grexit rise – going from an already likely 1 to 4 on Friday to a probable 1 to 8 now at William Hill – are presenting an ever-greater opportunity for the bookmakers to make money and advertise their services.

"We are seeing an opportunity to spread the word about what we do. It's a business opportunity for us," a William Hill spokesman said, adding: "We are not accepting drachmas yet, but we might be at some point."

http://www.independent.co.uk/news/b...features/prepared-for-the-grexit-7763967.html

 

[young-gun]

I found this via Google, although I was looking for a more 'local' result:



http://www.independent.co.uk/news/b...features/prepared-for-the-grexit-7763967.html

haha well there ya go.

 

[CanOz]

The cost of a Greek exit from the Euro would most certainly be catastrophic.

CanOz

 

[Tyler Durden]

The cost of a Greek exit from the Euro would most certainly be catastrophic.

CanOz

I read that, thanks. But I figure there must be someone or something out there who will benefit from all this.

 

[young-gun]

The cost of a Greek exit from the Euro would most certainly be catastrophic.

CanOz

I have become to arrive at the same conclusion recently, at first I was thinking it could have gone either way.

 

[CanOz]

I read that, thanks. But I figure there must be someone or something out there who will benefit from all this.

Might pay to be short something like a cuurency ETF, or country ETF.

CanOz

 

[Tyler Durden]

Might pay to be short something like a cuurency ETF, or country ETF.

CanOz

LOL!

 

[CanOz]

Here is EWP, the ETF for Spain. Weekly.....heading lower.

CanOz

 

[McLovin]

I haven't done any research into this but there might be opportunities within Greece for companies that have significant foreign derived income. Greek shipping comes to mind. Also tourist based companies which may be able to continue pricing in euros.

Presumably, they'll all be sold off and the take a huge devaluation with the drachma, even though most of their revenue is derived in foreign currency.

 

[Gringotts Bank]

When is it likely this will be decided one way or the other?

 

[Tyler Durden]

When is it likely this will be decided one way or the other?

June 17? Can't remember where I read that...

 

[qldfrog]

June 17? Can't remember where I read that...

believe it is the day elections will have decided who rules Greece..but please check, from memory only

 

[NewbAndy]

believe it is the day elections will have decided who rules Greece..but please check, from memory only

17th it is. The 18th will be an interesting day for sure!

 

[Gringotts Bank]

17th ok.

I'm getting the feeling that markets are going to be stuck in a holding pattern until then. Followed by some decent volatility hopefully.

 

[imperator]

Surely Greece won't be stupid enough to actually try to go it alone...

I think the more important question is when will the EU come out with a growth package? There's got t be one coming and let's hope it's big!!!

 

[wayneL]

Surely Greece won't be stupid enough to actually try to go it alone...

I think the more important question is when will the EU come out with a growth package? There's got t be one coming and let's hope it's big!!!

Well, they did for 3000 or 4000 years.

 

[imperator]

Well, they did for 3000 or 4000 years.

They certainly did. Of course, at that time that was the natural evolutionary position, where all their neighbors were also "going it alone".

However now we have the situation where they are a member of a currency union which is also to a certain extent an economic union - although as it turned out not a enough of an economic union, and certainly not a fiscal union, but that's getting a tad off track.

The point is, for Greece, there are disastorous consequences of leaving the Euro Zone. These include:
1. The fact that all Greece assets and liabilities are in Euro's... How are those values transferred into drachmas?
2. Who will trade with Greece in the aftermath, given they will be trying to trade with drachmas (or whatever they choose to call it?) eventually that issue will be over come, but initially, it will be very difficult for Greece to trade internationally.
3. The Greek govt, and consequently the Greek banks will be locked out of international financial markets for some period. (of course the govt already is but this is alleviated to a degree by the EU, IMF and ECB assistant which they will lose if they leave). The loss of access to markets will likely be prolonged. As a result, how will they finance themselves? Without international capital, and a local currency which in my view non-Greeks will be extremely hesitant to do business in and therefore purchase, how does Greece's outlook improve?
4. Greece's substantial structural economic issues will not be solved by an exit. Of course, having a currency press would theoretically help, but when no one is willing to purchase that currency outside of the country - or if so only at a ridiculously low price that breeds inflation - that will not benefit Greece in an exit scenario.
5. I cannot see how they would be better placed to deal with their financial and economic issues without international support.

To summarize, if they are to leave, there will be a painful adjustment process that will take an uncertain amount of time to play out. It will be years however. Of course, they are currently going through an adjustment process, and that is painful, but no where near as bad as what awaits them if they exit.

It is for the above reasons (and others of course) that it is my central view that Greece won't exit. Terms may be negotiated provided Greece don't vote in too much of a hard lined govt. additionally, it is my central scenario that Europe comes up with a pro growth package over the next few months in an attempt to introduce somewhat of a balance between austerity and facilitation of growth. (This has to occur due to the negative feedback loops associated with too much austerity - some of the consequences of which we are already seeing). Of course, there is a big risk that I am bei a tad optimistic in expecting Europe to get off its backside and implement some decent policy.

Happy to hear contradictory views. Apologies in advance for any spelling mistakes, I'm on my iPad and have not proofed.

 

[wayneL]

Though I disagree with parts your premise, I agree that with the latest developments, it seems Greece will not leave.

I don't agree it will be good for them long term as I see problems reoccurring in the future. They might stave off breakup of the Euro for now, but ultimately it is doomed IMO.