KEPE: The positive expectations for the course of the Greek market are strengthened

The positive expectations for the recovery of the Greek economy are gradually strengthened, although a series of short-medium-term economic effects of the pandemic (related to supply chains, production and transportation costs, prices, etc.) are maintained.

This results from the two innovative and specialized indicators aimed at the regular monitoring of the economic situation that is prepared and published on a monthly basis by the Center for Planning and Economic Research.

In more detail, as announced today by KEPE, the following emerge from the two indicators:

– Advanced KEPE Leadership Index. It is a Composite Leadership Index (ADR) based on a dynamic factor model, constructed using six selected monthly economic variables with lead characteristics. It provides precursors for the course and the transformations in the Greek economic activity, before their imprinting in the current sizes of the total economic activity. According to the most recent observation for July 2021, the GSP increased, after adjusting to the previous reporting period, thus even further exceeding the highest level recorded in August 2018, after the multi-year economic crisis. This development seems to reflect the further strengthening of the positive expectations and assessments of the participants in the economic activity, providing precursors for the continuation of the improvement of the economic conditions. In other words, there do not seem to be any indications of a more restrained assessment of the recovery of the Greek economy. However, the uncertainty that still accompanies the overall development of the pandemic remains significant, but there is also the possibility that its growth potential will weaken in the near future, based on a series of short-term economic impacts of the pandemic (supply chain-related production and transportation costs, prices, etc.). For this reason, the revaluation of the SBS becomes necessary, as the integration of the new data is expected to indicate the continuation or not of the observed trends and to provide additional indications for the course of the future domestic economic activity.

– “Fear” Index KEPE GRIV. The imputed volatility index KEPE GRIV or “fear” index reflects the uncertainty of the derivatives market participants for the expected short-term course of the Greek market and is calculated based on the prices of the options of the FTSE / XA Large Cap index. The price of the KEPE GRIV index decreased in October 2021, reaching 26.52% on 29/10/2021 from 29.11% on 30/9/2021. The evolution of the index reflects a decrease in uncertainty about the expected short-term course of the Greek market compared to the end of last month. The index remained at levels below its historical average (since January 2004) for the Greek market, which is at 32.73%. In addition, in October 2021 the average daily value of the index moved close to the level of the previous month, reaching 28.37% from 27.57% in September 2021.