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NEWSLETTER of March 30, 2018

 

The following content has been added at finexpert:


Studies > M & A

Baker & McKenzie

GLOBAL TRANSACTIONS FORECAST: FINANCIAL INSTITUTIONS

Ultra low interest rates, tech enabled disruption and regulatory pressure, all of which have squeezed profitability and increased costs, have created an environment which will drive M&A activity across the financial sector throughout 2018 and beyond. This is according to the Global Transactions Forecast, which anticipates that global M&A values in the financial sector will rise to USD 616 billion in 2018, up 25% from USD 462 billion in 2017. Similarly global IPO values will grow nearly 40% to USD 84 billion, led by FinTech unicorns raising capital for disruption, many of which will be Asian based. >more

Studies > Corporate Finance

Ernst & Young

GLOBAL IPO TRENDS: Q1 2018

Despite geopolitical uncertainties and market volatility, global IPO activity in the first three months of 2018 posted strong results to start the year. Global IPO markets raised US$42.8b in Q1 2018, a 28% year-over-year (YOY) increase on Q1 2017. However, with 287 listings this quarter, volume was down 27% YOY compared with Q1 2017, when it produced the highest number of listings for first quarter IPOs since 2007. These and other findings were published recently in the EY quarterly report, Global IPO trends: Q1 2018. >more

Studies > Alternative Investments

PwC

EMERGING TRENDS IN REAL ESTATE: THE GLOBAL OUTLOOK 2018

Real estate continues to attract capital, demonstrating its stability and appeal over other asset classes in an otherwise uncertain investment world. However, reading across the three recently published Emerging Trends in Real Estate reports, an undercurrent of caution exists. Influenced by a gradual reversal of monetary policy, late-cycle property market and a fundamentally different demand environment. All interviewees for Global Emerging Trends in Real Estate 2018 agree, these are challenging times for an industry that must somehow strike the right balance between risk management, innovation and entrepreneurship. >more

Studies > Performance

Bain & Company

SMALL BUSINESS ECOSYSTEMS: BANKS' NEXT CHALLENGE

It’s not easy for small companies to grind through the basic operations of running a business. Owners and managers spend substantial time navigating separate platforms for banking, enterprise resource planning, human resources and other activities, each with its own spreadsheets of critical information. Retail merchants must sell through multiple channels, including the online platforms offered by the Rakutens, Alibabas and Amazons of the world. And small and medium-sized enterprises (SMEs) selling online are heavy users of payments technology. How can bankers help contain this sprawl? They can devise a simple, easy-to-use package that would integrate banking functions with, say, an external partner’s accounting and payroll software. So there is a big world beyond core banking services. But do banks have the credibility and the right partners? >more


Research Papers > Corporate Finance

THE MYTH OF THE CREDIT SPREAD PUZZLE

Peter Feldhütter, and Stephen M. Schaefer
2018
We ask whether a standard structural model (Black and Cox (1976)) is able to explain credit spreads on corporate bonds and, in contrast to much of the literature, we find that the model matches the level of investment grade spreads well. Model spreads for speculative grade debt are too low and we find that bond illiquidity contributes to this underpricing. Our analysis makes use of a new approach for calibrating the model to historical default rates that leads to much more precise estimates of investment grade default probabilities. >more

Research Papers  > Alternative Investments

DO HEDGE FUNDS EXPLOIT RARE DISASTER CONCERNS?

George Gao, Pengjie Gao, and Zhaogang Song
2017
We find hedge funds that have higher return covariation with a disaster concern index, which we construct using out-of-the-money puts on sector indices, earn significantly higher returns. These funds have better skills in exploiting the market's ex ante rare disaster concerns (SED) that are not associated with disaster risk. In particular, high-SED funds on average outperform low-SED funds by 0.96% per month, but have less exposure to disaster risk. They continue to deliver superior future performance when SED is estimated using the disaster concern index purged of disaster risk premiums, and have leverage-managing and extreme-market-timing abilities. >more