Political Uncertainty and the Greek Stock Market over the Period 2011-2015

Abstract

In this article, we examine the possible effects of the successive elections in Greece over the period 2011-2015 on the pricing behaviour of four basic stock indices of Athens Exchange. Our analysis reveals that, with the exception of the pre-election period before the elections of the 6th of May 2012, returns over the pre-election periods are positive. During the rest of the periods assessed returns are negative with the exception of the period 18th June 2012 to 31 December 2014 over which returns are positive. On the other hand, the variance in the Greek market is relatively low during the pre-election periods compared to the volatility during the periods before the announcement of an election process or after carrying out the elections. In addition, volatility surged during the interval which followed the announcement of the referendum of the 5th of July 2015 on 28 June 2015 till the announcement of the elections of the 20th of September 2015 on 28th August 2015