Uncertainty about Greece’s membership of the euro has triggered a sell-off in Greek assets. The Athens Stock Exchange is down 42% since March, so why is Saxo Bank’s Peter Garnry bullish on Greek equities?

Saxo Bank’s Head of Equity Strategy Peter Garnry says markets seem to have overreacted to speculation about Greece leaving the euro, especially after German media reported that Germany believes the euro could cope with a so-called “Grexit”.

Greece is heading for elections on January 25 and opposition party Syriza is leading in the polls. The left-wing party has previously challenged the terms of Greece’s bailout and said it sought Greece’s exit from the EU’s common currency.

Recent comments from the party, however, have been more moderate, and Peter says that combined with a positive outlook for the Greek economy could fuel a rebound in Greek equities