NEWSLETTER of February 3, 2023

The following content has been added at finexpert:

Amundi
BONDS ARE BACK: CREDIT MARKETS IN FOCUS DURING 2023
2022 was the year of a great repricing in bonds as global central banks took a hawkish turn in their fight against inflation. While the great repricing resulted in extreme bond volatility, we have entered a new phase of adjustment for the yield curve, where bonds are starting to be back in focus. In this ‘bonds are back’ phase, more attractive yield levels, alongside lower rate volatility, drove a return of demand for the asset class in late 2022 and we expect the trend to continue this year. >more

Lazard
OUTLOOK ON EUROPE: JANUARY 2023
The stock market revival of recent months seems premature, given the full effects of 2022’s aggressive hikes in interest rates have yet to be fully felt. We believe forecasts of a shallow recession in the US and Europe are overly optimistic. However, the headwinds facing European economies and companies are arguably more priced into stock market valuations than in other developed equity markets, while Europe is likely to exit recession first. >more

Capgemini
WEALTH MANAGEMENT: TOP TRENDS 2023
The wealth industry is undergoing a paradigm shift fueled by changing demographics, generational wealth transfer, and rapidly expanding digitalization. Customers are demanding a wider array of investment options and an improved, seamless service experience; relationship managers are being empowered by access to real-time data, streamlined workflows, and multichannel and digital tools. And forward-looking firms will achieve new growth by mining new customer segments and exploring acquisition and ecosystem partnership opportunities. >more

EY
PROGNOSEÄNDERUNGEN IN DAX40, MDAX UND SDAX: JANUAR 2023
The threat of recession, rising energy prices and a decline in purchasing power among the population are causing more and more companies to take a more cautious view of the future: The number of profit or sales warnings issued by companies listed on the DAX, MDAX and SDAX rose to 70 last year, up 35 on the previous year. The sharpest increase in warnings was recorded in the DAX: After seven negative forecast corrections in the previous year, a total of 18 such warnings were counted in 2022. In the MDAX, the number rose from eight to 15, and in the SDAX from 20 to 37. Despite the significant increase in 2022, however, the number of warnings is still well below the previous record of 108, which was reached in 2020 when the outbreak of the Corona pandemic led to companies having to concede their forecasts in rows. >more

USING ETFS TO CONCEAL INSIDER TRADING
Elza Eglīte, Dans Štaermans, Vinay Patel, and Tālis J. Putniņš
2023
We show that exchange traded funds (ETFs) are used in a new form of insider trading known as “shadow trading.” Our evidence suggests that some traders in possession of material non-public information about upcoming M&A announcements trade in ETFs that contain the target stock, rather than trading the underlying company shares, thereby concealing their insider trading. Using bootstrap techniques to identify abnormal trading in treatment and control samples, we find significant levels of shadow trading in 3-6% of same-industry ETFs prior to M&A announcements, equating to at least $212 million of such trading per annum. Our findings suggest insider trading is more pervasive than just the “direct” forms that have been the focus of research and enforcement to date. >more

GREEN SPACS
Nebojsa Dimic, John W. Goodell, Vanja Piljak, and Milos Vulanovic
2023
We examine the characteristics of Special Purpose Acquisition Companies (SPACs) focused on green causes. The growing importance of SPACs in financial markets has led to an increased presence of entrepreneurs raising capital to fund environmently friendly companies. We examine the structural characteristics of ‘green SPACs’: explaining their ecosystem, documenting the primary determinants of IPO size, speed of going public, and calculating their returns around merger announcements. Regarding green SPAC size, we find that the amount of capital raised depends on geographical focus, CEO characteristics, choice of exchange, and specialization of respective legal counsels. The speed to IPO is related to respective geographical and legal-counsel characteristics. At the same time, green SPACs exhibit cumulative market-adjusted returns in the range of 6% to 12% around merger announcement. Further, while merger returns are positive at merger date, they quickly become negative (-1 to -9%) declining further with time. >more