Greece - Adex gets moving
Hedging equity risk is now possible through the Athens Derivatives Exchange (Adex) with its futures contract based on the FTSE-ASE 20 Index covering blue chip stocks. Options and bond futures are on their way as are tie-ups with other European exchanges and regional indices. Adex chairman Panayotis Alexakis, a finance professor at Athens University and a business consultant, explains how he believes the market will develop. By Michael Peterson.
Why was this the right time to set up the derivatives exchange?
Judging from past experience, we decided that it's more important to start the market than to try to create all the preconditions for the market which would take one or two years and [at the end of it] we may still not have a derivatives market in Greece. Of course most of the basic preconditions were in existence. Most important the stability of the Greek economy and the situation of the capital market justified an organized derivatives market.
The decision was taken to start the market as we believed we had to start something in order to push the brokerage firms, funds and statutory investors to make the investments in management systems and personnel. If you tell them "please invest first extensively and then we are going to operate the market", if you tell them "please educate your personnel and your investors and then we are going to start the market", with all this dramatic growth that we had in this period at the stock exchange we may not have had a derivatives exchange in Greece.