Exactly half of the delegates attending the Expert Investor Luxembourg event last Thursday are fed up with Greece and want to sink it off by no longer financing bail-outs for the country.
Interestingly, a couple of those who want to stop all funding for Greece believe the country will still keep the euro. Nevertheless, the share of Grexit-believers in the room was relatively high at 43%.
The audience in Luxembourg, a pretty representative sample of European fund selectors, was precisely split in two when it comes to the question whether the financial markets correctly assess the impact of the Greek saga. However, those who think financial markets got it wrong shouldn’t too easily believe that’s an opportunity to make money, said Jon Jonsson, a global fixed income portfolio manager at Neuberger Berman.
“If you invest tactically here, you have to be right twice in a six-week timeframe or so. That’s very difficult,” he said, though he admitted he had taken profit on his peripheral bond exposure in April. But that was more of a strategic move. “I’m ultimately negative on yield levels in Europe, despite QE.
Steve Cordell, a European equity manager at Schroders, doesn’t think anything the Greek government will do, will affect his portfolio. “Greece is largely irrelevant,” he said. Besides, he believes German chancellor Angela Merkel will be willing to compromise in the end, though Monday’s ‘deadline summit’ proved to be only the starting point of a new round of talks…
It’s all about politics
And the negotiations are likely to drag on for a bit longer, Cordell believes. “When Greece will default at the 1st of July, the IMF is going to have a month to declare that.”
Dimitris Zerdilas, a Greek private banker at Banque de Patrimoines Privés and a delegate at the conference, agreed with Cordell, arguing the main issue at stake is political.
“I closely monitor the situation for my clients and, while default is the only way to proceed in the negotiations now, there is mainly a political issue on the table. On the technicality there is not so much difference,” he said, with the Greek side insisting on debt restructuring, while the Europeans first want reforms, and then restructuring.