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NEWSLETTER of March 16, 2018

 

The following content has been added at finexpert:


Studies > Alternative Investments

Bundesverband Deutscher Kapitalbeteiligungsgesellschaften (BVK)

DER DEUTSCHE BETEILIGUNGSKAPITALMARKT 2017 UND AUSBLICK AUF 2018

The German private equity market reported a record year in 2017. A total of €11.3 billion was invested in some 1,100 companies by private equity firms last year. Buyout investments totalled €8.94 billion, over three-quarters more than the previous year’s €5.02 billion. Once again, a few large transactions were largely responsible for this. The most spectacular transactions in 2017 were the takeovers of STADA, Germany’s biggest buyout in more than 10 years, and Ceramtec. >more

Studies > Performance

White & Case

THE YEAR OF BLOCKCHAIN: GLOBAL LEGAL FRAMEWORK BEGINS TO TAKE FORM

Global interest in Initial Coin Offerings (ICOs) may have reached a fever pitch last year, but 2017 was also memorable for development of the legal framework that surrounds the use of VC&B, particularly in the US. But the development and legitimization of VC&B also gained momentum in other jurisdictions around the world. Governments are not only building the legal framework for the commercial and financial use of VC&B, but they are also adopting blockchain-based applications for their own regulatory processes. >more

Studies > Macro

J.P. Morgan

DER INVESTMENT-AUSBLICK FÜR 2018

The macroeconomic environment in 2017 provided fertile ground for most investment markets. The recovery has intensified across sectors and geographic regions. Although deflation risks have declined, inflation has not accelerated to levels that would have clouded the picture. Central banks have pledged to maintain their loose monetary policy for the foreseeable future, which has been welcomed by both equity and bond investors. >more

Studies > Macro

European Central Bank

ECB STAFF MACROECONOMIC PROJECTIONS FOR THE EURO AREA, MARCH 2018

The economic expansion in the euro area is projected to remain robust, with growth rates staying above potential. Real GDP growth is projected to slow from 2.5% in 2017 to 1.7% in 2020 as some tailwinds slowly fade away. HICP inflation is expected to pick up to 1.7% in 2020, supported by a gradual rise in underlying inflation as capacity constraints become more binding. >more


Research Papers > Corporate Valuation

CHOOSING FACTORS

Eugene F. Fama, and Kenneth R. French
2017
Our goal is to develop insights about the max squared Sharpe ratio for model factors as a metric for ranking asset-pricing models. We consider nested and non-nested models. The nested models are the CAPM, the three-factor model of Fama and French (1993), the five-factor extension in Fama and French (2015), and a six-factor model that adds a momentum factor. The non-nested models examine three issues about factor choice in the six-factor model: (i) cash profitability versus operating profitability as the variable used to construct profitability factors, (ii) long-short spread factors versus excess return factors, and (iii) factors that use small or big stocks versus factors that use both. >more

Research Papers > M & A

CASH WINDFALLS AND ACQUISITIONS

Bastian von Beschwitz
2018
This article studies the effect of cash windfalls on the acquisition policy of companies. As identification I use a German tax reform that permitted firms to sell their equity stakes tax-free. Companies that could realize a cash windfall by selling equity stakes see an increase in the probability of acquiring another company by 19 percent. I find that these additional acquisitions destroy firm value. Following the tax reform, affected firms experience a decrease of 1.2 percentage points in acquisition announcement returns. These effects are stronger for larger cash windfalls. My findings are consistent with the free cash flow theory. >more