Two days left only until the elections and the citizens, with them and the investorsThey know more or less what the parties’ pre-election programs include. They also know what they like or what worries, excites or scares them. In the case of investors, it is not difficult to identify what is it that worries them. Or rather what worries them about the stock market and their investments.
The imposition of “maximum rates of return”, the significant increase in the tax rate of dividends distributed by companies, the extraordinary taxation of “excess profits” in some business sectors. All of this is clearly included within in the economic programs of two of the three largest political parties (at least according to converging estimates).
We will start where things are clearer, that is, with the taxation of dividends distributed by companies to their shareholders. his programme SYRIZA – PS provides youdoubling the rate from 5% to 10% for dividends that exceed 50,000 annually and their escalation to 15% due to higher dividends, but without making it clear how the escalation will occur.
his programme PASOK – KINAL provides for an immediate tripling of the corresponding rate from 5% to 15% and it goes further, since it affirms that it must gradually reach the rates applicable to the taxation of salaried work. The implementation of these programs will obviously reduce the profitability of the final dividend of all companies based in our country.
In particular for listed companies, it will make them less attractive to Greek investors, which will logically lead to their lower valuation, with negative consequences for the value of individual portfolios and also for the institutional investors they manage. money. of Greek citizens, not necessarily from a large financial surface.
Another point that investors and markets do not like at all is what has been mentioned in the taxation of “super-profitable” companies in certain sectors of the economy. The SYRIZA-PS program establishes that the “excess profits” of energy companies and refineries will be immediately taxed at a rate of 90%.
According to the party’s calculations, 3,500 million euros will be raised with this extraordinary appraisal, although some of those responsible have reported even higher amounts. The corresponding PASOK-KINAL program is a bit more general, referring to extraordinary taxation of the “super profits” of banks and large companies in monopolistic sectors of the economy, without detailing the tax rates.
Investors never like high taxes, especially when they are extraordinary and it comes immediately after a period of many corporate years in deficit, as is the case with banks, or it follows a period of severe deficit as is the case with refineries that suffered major hits during the pandemic.
Another category of advertisements is that which mentions, directly or indirectly, to a mandatory limitation of the profit margins of some companies. The SYRIZA-PS program provides for the establishment of a maximum profit rate of 5% in the energy sector. The corresponding PASOK – KINAL program refers to the establishment of a maximum retail energy price, which will essentially mean an administrative limitation on the profitability of companies in this sector.
Perhaps these two announced measures are the ones that cause the most concern because they imply a permanent limitation of the profitability of these companies, which will probably lead to the limitation of the investments made by these companies. The lower the return on a new investment, the lower the probability of its realization. Especially in the energy sector, this will have very negative consequences because our country needs very large investments in the context of the energy transition.
the investorsnot only the bag, the truth is that they are not happy at all reading and listening to all this, because the possibility of the participation of these parties in the next government is not negligible, in fact in the case of PASOK – KINAL it is considered quite possible.
However, in addition to the negative consequences of the above clear programmatic positions for the stock market and investors in general, the statements of certain executives about what their party is going to do cause very negative impressions and even greater concern. These statements immediately cause a stir and are later denied by the party leadership. However, concerns remain as investors, as well as public opinion, believe that if he takes power, such views will “go out the window”.
A more recent but very characteristic example is that of the declarations of a high official of SYRIZA – PS about the possible reestablishment of the link between the amount of the self-employed insurance contributions and their income, which if done would bring about a sharp increase in insurance quotes for a long time a large number of professionals.
The commotion caused the president of the party to publicly deny this possibility, but the truth is that many freelancers are still upset. This particular example may not be purely tax and investment interest in nature, but it certainly weighs on the investment climate and it makes many wonder what the reality of the party’s programs is.
The good news is that there is only one more day of the election campaign left and the chances of hearing anything that causes concern or shock to investors and the market are quite limited. But this does not mean that they have forgotten what they have heard so far.