13 Jan 2025

SAFE index measures optimism in Germany's C-Suites

SAFE publishes a new index that provides insights into the mood of top managers of listed companies

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The Leibniz Institute for Financial Research SAFE presents a new monthly market indicator: the SAFE Manager Sentiment Index. The index value shows how optimistic or pessimistic CEOs and CFOs of companies listed in the DAX family of stock market indices are in current annual and quarterly reports and earnings conference calls.

The index was developed by Alexander Hillert, Professor of Finance and Data Science at SAFE. With his team and modern text analysis methods, he collects and evaluates positive and negative statements in corporate reports and conference transcripts. The results provide insight into the current willingness of management to invest and also allow insights into medium- and long-term trends in stock returns.

Managers are "cautiously pessimistic" at the beginning of 2025

"With the SAFE Manager Sentiment Index, Alexander Hillert and his team have developed a valuable tool that complements previous survey-based indices," says Florian Heider, Scientific Director of SAFE. "By taking into account statements directly from the managers of large, internationally active companies, the index provides a particularly accurate picture of the economic situation".

In January, the index value is slightly negative, which means that the negative mood among managers is marginally predominant at the moment. Heider comments: "On average, managers are cautiously pessimistic, but more optimistic than might be expected given the overall economic situation in Germany. This result underlines the export orientation of German DAX companies." 

Scientific methodology

The index value is based on the difference between negative words such as "downsizing" and "serious" and positive words such as "growth" and "profitable" in the texts of the last three months. The words are rated as positive or negative according to scientifically established word lists. The text analysis method thus filters out the current "net optimism" from the current statements of managers.


SAFE Manager Sentiment Index

SAFE Manager Sentiment Index

The concept of the SAFE Manager Sentiment Index is based on a study published in 2019 in the renowned Journal of Financial Economics (Jiang et al. 2019). The results of the study show that optimistic statements in the annual and quarterly reports and conference calls are associated with higher investment in the short run, but lower stock returns and profits in the long run.

The SAFE Manager Sentiment Index contributes to a better understanding of the current economic climate in listed companies in Germany. With its innovative methodological approach, it complements existing indices and offers companies, investors, and policy makers a tool to better understand financial market developments. 

Detailed information, charts and a White Paper on the methodology are available on the SAFE Manager Sentiment page.

Release Dates 

The other scheduled release dates for the first half of 2025 are 

  • Tuesday, 11 February
  • Tuesday, 11 March
  • Wednesday, 9 April
  • Tuesday, 13 May
  • Wednesday, 11 June