NEWSLETTER of April 28, 2023

The following content has been added at finexpert:

We updated the capital market data

(Multiples, Betas and Returns) as to April 15, 2023 >more

Clifford Chance
FINTECH IN 2023: FIVE TRENDS TO WATCH
Last year was a tough one for fintech with the collapse of a number of high-profile industry players, as well as wider economic pressures including the war in Ukraine, supply chain challenges and high inflation. Following the bold predictions we made last year, we highlight five key trends for fintech in 2023. >more

J.P. Morgan
GUIDE TO THE MARKETS: Q1 2023
We are pleased to publish the Guide to the Markets - Europe for the first quarter of 2023. The Guide illustrates a comprehensive set of market and economic data, trends and statistics through quick-to-follow charts and graphs that you can share with your clients. The fully updated Guide begins with an overview of the global economy, then compiles key economic indicators for each major region and highlights a current regional theme for the quarter in a focus chart. >more

State Street
DIGITAL ASSETS AND INVESTMENT STUDY 2022-2023
State Street commissioned Oxford Economics to conduct a survey of 300 investment institutions, including asset managers, asset owners and insurers, about their approaches to digital assets and investment technology. It significantly expands on our previous research in this field, looking into organizations’ preparedness for incorporating code-based smart contracts, blockchains and other distributed ledger technologies into their investment processes, and their preparedness to hold and trade digitally tokenized versions of traditional securities. >more

International Monetary Fund
WORLD ECONOMIC OUTLOOK: A ROCKY RECOVERY
The baseline forecast is for growth to fall from 3.4 percent in 2022 to 2.8 percent in 2023, before settling at 3.0 percent in 2024. Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023. In a plausible alternative scenario with further financial sector stress, global growth declines to about 2.5 percent in 2023 with advanced economy growth falling below 1 percent. Global headline inflation in the baseline is set to fall from 8.7 percent in 2022 to 7.0 percent in 2023 on the back of lower commodity prices but underlying (core) inflation is likely to decline more slowly. Inflation’s return to target is unlikely before 2025 in most cases. >more

THE CHANGING LANDSCAPE OF CORPORATE GOVERNANCE DISCLOSURE: IMPACT ON SHAREHOLDER VOTING
David Becher, Michelle Lowry, and Jared I. Wilson
2023
While mutual funds are required to vote on directors in every portfolio firm every year, many funds satisfy this requirement by following the recommendations of proxy advisory service companies such as ISS. However, companies complain that ISS employs one-size-fits-all policies, which do not consider firm-specific governance demands. A rational response to such frictions would be for firms to decrease investors’ costs of evaluating directors’ expertise. Consistent with this conjecture, we find that firms increasingly disclose directors’ expertise in image-based formats. Moreover, these disclosures lead to less reliance on ISS, and to higher voting support, particularly in cases where ISS tends to employ blanket recommendations and in firms with high information asymmetry. Finally, we find that this transparent disclosure of directors’ skills is informative regarding future firm outcomes. >more

TAKING OVER THE SIZE EFFECT: ASSET PRICING IMPLICATIONS OF MERGER ACTIVITY
Sara Easterwood, Jeffry M. Netter, Bradley S. Paye, and Mike Stegemoller
2023
We show that merger announcement returns account for virtually all of the measured size premium. An empirical proxy for ex ante takeover exposure positively and robustly relates to cross-sectional expected returns. The relation between size and expected returns becomes positive or insignificant, rather than negative, conditional on this takeover characteristic. Asset pricing models that include a factor based on the takeover characteristic outperform otherwise similar models that include the conventional size factor. We conclude that the takeover factor should replace the conventional size factor in benchmark asset pricing models. >more