NEWSLETTER of December 18, 2020

The following content has been added at finexpert:

McKinsey
A TEST OF RESILIENCE: BANKING THROUGH THE CRISIS, AND BEYOND
Ten months into the COVID-19 crisis, hopes are growing for vaccines and new therapeutics. But victory over the novel coronavirus still lies some nine to 12 months in the future. In the meantime, second and third waves of infection have arrived in many countries, and as people begin to crowd indoors in the months ahead, the infection rate may get worse. As a result, the potential for near-term economic recovery is uncertain. The question of the day is, “When will the economy return to its 2019 level and trajectory of growth?” Unlike many past shocks, the COVID-19 crisis is not a banking crisis; it is a crisis of the real economy. Banks will surely be affected, as credit losses cascade through the economy and as demand for banking services drops. >more

Lazard
WHAT TO WATCH IN 2021
As 2020 nears an end, investors face a challenging combination of crosscurrents. On the positive side, the US election has passed with a market-friendly outcome and three COVID-19 vaccines appear to be within weeks of initial distribution, with more likely to follow. Typically, these events would be the all-clear signal investors need to shift out of defensive work-from-home beneficiaries into cyclical recovery plays. However, major developed countries across the Northern Hemisphere are facing new record levels of COVID-19 infections, spurring new economic lockdowns and increasing the risk that many companies, particularly small businesses, might not make it to the other side of this pandemic. Judging from our earlier pandemic experience, this scenario would signal exactly the opposite market reaction as that to the vaccines. Investors face a timing conundrum, indicating yet again that it is likely to be darkest before the dawn. >more

PwC
EMISSIONSMARKT DEUTSCHLAND Q4 2020
Despite the pandemic, the German economy is in a comparatively solid position, the markets are continuing to recover after the slump in March, and the stock indices are on an upward trend. However, issuance activity has not benefited from this positive development: Some stock market aspirants postponed their plans for an initial public offering (IPO). Only seven companies made their debut on the Frankfurt Stock Exchange in 2020 as a whole. That is more than in the previous year, when only four companies ventured onto the trading floor. However, the issue volume of €1.059 billion is significantly below the previous year (€3.548 billion) - making 2020 the weakest IPO year since the financial crisis. >more

Andersch
IMMOBILIENBRANCHE - DAS ENDE EINER ERFOLGSGESCHICHTE?
A minus of 25 to 30% in textile retail - the Corona year 2020 threatens to become a disaster not only for the fashion industry, but also for the landlords of the business units. Even the top locations will not be spared from the expected increase in insolvencies. Suppliers must prepare for this now - and act. The industry update provides an up-to-date overview of the entire market situation of the real estate industry in and after the corona crisis. >more

OPENING-UP TRAJECTORIES AND ECONOMIC RECOVERY: LESSONS AFTER THE FIRST WAVE OF THE COVID-19 PANDEMIC
Asli Demirgüç-Kunt, Michael Lokshin, and Iván Torre
2020
This paper analyzes the reopening process of countries in Europe and Central Asia after the first wave of the COVID-19 pandemic and provides evidence on the effects of different reopening trajectories and their timing and speed on economic recovery. The analysis indicates that countries that adopted a gradual, staged reopening experienced stronger economic recovery compared with the countries that rushed into lifting the restrictive measures before the pandemic was under control. Postponing lifting the restrictions until after the pandemic’s peak was reached has a positive impact on economic activity. Governance also matters: a higher level of trust in government is associated with increased economic activity among countries that carried out a gradual reopening process. There is also suggestive evidence that providing people objective data on the progress of the pandemic may speed up the recovery process. >more

DRIVERS AND PERFORMANCE EFFECT OF CORPORATE ASSET SALES AROUND ACQUISITIONS
Nihat Aktas, Aleksandra Baros, and Ettore Croci
2020
Corporate divestitures often accompany acquisitions, representing on average 33% of the acquisition value. Relying on a worldwide sample, we provide support for the efficient restructuring view of acquisition-related divestitures. About 60% of these divestitures occur following the acquisition completion, especially in large deals. We also document that acquirers divest more when they are diversified and acquisitive. On average, divestitures are associated with an increase of 1.85% in the value creation around focal acquisitions. Examining returns for divestitures, we find that those around acquisitions are not transactions with weak bargaining positions. Overall, asset sales are a tool to ease an acquisition and bolster the associated synergies. >more