NEWSLETTER of April 24, 2020

The following content has been added at finexpert:

Marsh JLT Specialty

TRANSACTIONAL RISK INSURANCE 2019: YEAR IN REVIEW

Transactional risk insurance includes policies that cover risks related to M&A, such as representations and warranties (R&W) insurance, or warranty and indemnity (W&I) insurance, tax insurance, and contingent liability insurance. The report looks back at the market in 2019, which marked the sixth straight year that global M&A value topped $3 trillion, although that was down slightly from the prior year. At the same time, the amount of transactional risk insurance placed by Marsh JLT Specialty increased significantly. >more

ValueTrust Financial Advisors

EUROPEAN CAPITAL MARKET STUDY

Given the current COVID-19 crisis, ValueTrust released the fifth edition of the European Capital Market Study already in March in order to give decision-makers guidelines with regard to current valuation parameters. The study analyzes the relevant parameters to calculate the cost of capital with the Capital Asset Pricing Model (risk-free rate, market risk premium and beta). Additionally, it determines implied as well as historical market and sector returns. Moreover, this study includes capital structure-adjusted implied sector returns, which serve as an indicator for the unlevered cost of equity. The relevered cost of equity can be calculated by adapting the unlevered cost of equity to the company specific debt situation. This procedure serves as an alternative to the CAPM. >more

McKinsey & Company

PRIVATE EQUITY AND THE NEW REALITY OF CORONAVIRUS

COVID-19 is an enormous global humanitarian challenge. Millions of health professionals are battling the disease, caused by the coronavirus (SARS-CoV-2), and putting their own lives at risk. Governments and industries around the world are working together to understand and address the challenge, support victims and their families and communities, and search for treatments and a vaccine. Every industry needs to respond to the crisis—including PE. This article provides an outline of the emerging playbooks for both PE firms and their portfolio companies. >more

J.P. Morgan

Q2 2020 GUIDE TO THE MARKETS: EUROPE

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

Bank for International Settlements

BIS QUARTERLY REVIEW: MARCH 2020

This Quarterly Review takes an in-depth look at the fast-changing world of payments. The speed of changes and the potential for disruption have propelled payment systems to the top of policymakers' agendas.  It also discusses the market impact of the coronavirus outbreak. >more

SURVEY: MARKET RISK PREMIUM AND RISK-FREE RATE USED FOR 81 COUNTRIES IN 2020

Pablo Fernandez, Eduardo de Apellániz, and Javier F. Acín
2020
This paper contains the statistics of a survey about the Risk-Free Rate (RF) and the Market Risk Premium (MRP) used in 2020 for 81 countries. We got answers for 87 countries, but we only report the results for 81 countries with more than 6 answers. Many respondents use for European countries a RF higher than the yield of the 10-year Government bonds. The coefficient of variation (standard deviation/average) of RF is higher than the coefficient of variation of MRP for the Euro countries. The paper also contains the links to previous years surveys, from 2008 to 2019. More than fifty respondents provided answers at the beginning of March and later, considering the coronavirus. Most of them increased MRP by 2%. >more

PRICE AND PROBABILITY: DECOMPOSING THE TAKEOVER EFFECTS OF ANTI-TAKEOVER PROVISIONS

Vicente Cuñat, Mireia Gine, and Maria Guadalupe
2020
This paper studies the effects of anti-takeover provisions on takeovers and identifies the channels through which they create or destroy value for firms, as well as for the economy as a whole. We provide causal estimates – that also deal with the endogenous selection of targets – showing that voting to remove an anti-takeover provision increases the takeover probability by 4.5% and garners a 2.8% higher premium, which results from increased competition for less protected targets. We also find evidence of net value creation in the economy stemming from more related acquisitions and targets being matched to more valuable acquirers. >more