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NEWSLETTER of October 12, 2018

 

The following content has been added at finexpert:


Tutorials
QoD13

Question of doubt in corporate valuation QoD#13: Is there anything special about negative Free Cash flows? (simple version) (Bernhard Schwetzler)

Negative Free Cash flows show up quite rarely in corporate valuation and valuators may sometimes be uncertain whether they require an adjustment. This video shows the potential reasons behind the negative sign of FCF and gives some guidance how to properly deal with it.
(October 12, 2018). >more


Studies > Performance

Ernst & Young

DAX-AUFSICHTSRÄTE UND VORSTÄNDE: INTERNATIONALITÄT UND VIELFALT

The executive boards of DAX companies became somewhat more international last year: between mid-2017 and mid-2018, the number of DAX board members holding a foreign passport rose from 67 to 69 - the proportion of foreign DAX board members thus rose from 35 to 36 percent. Conversely, the number of top managers with German (or dual) citizenship fell from 126 to 123. >more

Studies > Macro

J.P. Morgan

GUIDE TO THE MARKETS - Q4 2018

Updated each quarter, the Guide to the Markets illustrates a comprehensive array of market and economic trends and statistics for Europe. This includes information about equities, fixed income and other asset classes as well as macroeconomic analyses. >more

Studies > Macro

Allianz

GLOBAL WEALTH REPORT 2018

Financial assets  of households rose by a significant 7.7% to EUR 168 trillion in 2017, supported by synchronized economic recovery and strong financial markets according to the ninth edition of the ‘Allianz Global Wealth Report’. However, first data for 2018 suggests a much reduced growth. The report puts the asset and debt situation of households in more than 50 countries under the microscope. >more

Studies > Macro

Bank for International Settlements

BIS QUARTERLY REVIEW: SEPTEMBER 2018

Divergence is the name of the game. During the review period, while US financial markets powered ahead, emerging markets faced mounting pressure. One could say that, on average, global financial markets continued to do well, extending the previous vintage year. But the average was not particularly meaningful. It was a bit like that proverbial person whose temperature, on average, was fine, except that their head was on fire and their feet freezing. >more


Research Papers  > Alternative Investments

CAN INVESTORS TIME THEIR EXPOSURE TO PRIVATE EQUITY?

Gregory W. Brown, Robert S. Harris, Wendy Hu, Tim Jenkinson, Steven N. Kaplan, and David T. Robinson
2018
Private equity performance, both for buyouts and venture capital, has been highly cyclical: periods of high fundraising have been followed by periods of low absolute performance. Despite this seemingly predictable variation, we find modest gains, at best, to pursuing more realistic, investable strategies that time capital commitments to private equity. This occurs because investors can only time their commitments to funds; they cannot time when their commitments are called or when their investments are exited. There is a high degree of time-series correlation in net cash flows even across commitment strategies that allocate capital in a very different manner over time. >more

Research Papers > Risk Management

THE THEORY AND PRACTICE OF CORPORATE RISK MANAGEMENT: EVIDENCE FROM THE FIELD

Erasmo Giambona, John R. Graham, Campbell R. Harvey, and Gordon M. Bodnar
2018
We survey more than 1,100 risk managers from around the world on their risk management policies, goals, and perceptions. We find evidence consistent with some of the traditional theories of risk management, but not with all. We then analyze the reasons beyond “why” or “why not” firms hedge. We find that almost 90% of the risk managers in non-financial firms hedge to increase expected cash flows. We also find that 70%-80% of the risk managers say that they hedge to smooth earnings or to satisfy shareholders’ expectations. Our analysis also suggests that regulatory changes (e.g., Dodd-Frank Act of 2010) and new accounting rules put in place to increase market stability might discourage corporate hedging. Finally, we provide comprehensive evidence about hedging in the context of six forms of risk: interest rate, foreign exchange, commodity, energy, credit, and geopolitical risk. Among other things, we find that operational hedging is more common than hedging with financial contracts in all risk areas except foreign exchange. >more