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NEWSLETTER of January 14, 2021

The following content has been added at finexpert:

Studies > Performance

The number of female board members at listed companies in Germany has risen to a new high: Of the total of 700 board members, 94 are female. This means that the number of female board members rose by 20 within a year. The proportion of female board members increased by 2.4 percentage points year-on-year to 13.4 percent - this is also an all-time high in the period under review since 2013. Since January 2017, the proportion of women has doubled from 6.7 percent to 13.4 percent. >more

Studies > Corporate Finance

KfW Research
The low point on the credit market is behind us. This is positive news at the end of the year, even if we need to be cautious in our assessment. In the third quarter, banks granted 7.6% fewer new loans than last year. However, loan growth could turn positive as early as the final quarter. However, a large part of the jump in improvement is due to the elimination of the negative base effect. Beyond this, however, the external financing needs of companies are likely to rise somewhat more strongly than expected. The persistent supply bottlenecks are contributing to this. They make intermediate products and investment projects more expensive. This increases the associated funding requirements. >more

Studies > Alternative Investments

Never before has so much money flowed into German startups as last year. The total value of all venture capital investments in German startups more than tripled from EUR 5.3 billion to almost EUR 17.4 billion (up 229 percent). The number of financing rounds rose by 56 percent to 1,160, also setting a new record. In particular, the number of major deals with a volume of more than 100 million euros literally exploded from eight to 33 compared to the previous year. >more

Studies > Alternative Investments

With a total investment volume of €113.8 billion, the German real estate market posted a new record result in 2021. At around 20 percent, the takeover of Deutsche Wohnen by Vonovia accounted for a significant share of the total volume. Adjusted for this special effect, the transaction volume of EUR 90.3 billion was around 14 percent higher than in the previous year (2020: EUR 78.9 billion) and thus reached the pre-Corona level (2019: EUR 89.5 billion). 62 percent of German investors expect transaction volumes to move sideways at a high level in 2022. Around one-third even forecast an increasing transaction volume. The mood is thus more optimistic than in the previous year, when a rising volume was assumed by only a quarter of respondents. These are the findings of this year's "Real Estate Investment Market Trend Barometer" by EY Real Estate, for which around 220 investors active in the German real estate market were surveyed. >more

Studies > Macro

KfW Research
China's two longer-term development goals are to achieve high-income country status by 2025 and to double economic output by 2035. Achieving the first goal requires only a growth rate in nominal gross national income per capita of 4% per year on average. The second target, on the other hand, is more ambitious. This is because the contribution of capital to growth will continue to decline, partly because the ongoing restructuring of the growth model implies that investment will lose importance in favor of consumption. This development must be offset by general productivity gains and human capital formation. >more

Research Papers > Alternative Investments

Vikas Agarwal, George O. Aragon, Vikram K. Nanda, and Kelsey D. Wei
We examine the trading activity of institutional investors when mega hedge funds (MHFs) experience financial distress. In anticipation of a 1% drop in stock ownership by distressed MHFs next quarter, other institutions reduce their stock ownership of the same stocks by 1.79% in the current quarter. A one standard-deviation higher measure of anticipatory trading predicts 1.57% per year lower abnormal equity portfolio returns for distressed MHFs. Stocks that are anticipated to be sold by distressed MHFs experience negative abnormal returns and subsequent return reversals. We conclude that institutional investors front-run the distressed trades of MHFs and destabilize stock prices. >more

Research Papers > M & A

Tina Oreski
Using textual analysis and the firm life-cycle theory to proxy for a company's competitive strategy, this paper empirically examines the strategic similarity hypothesis. The findings show that mergers and acquisitions deals are more likely between companies implementing the same strategy. Moreover, same strategy deals yield higher announcement returns, asset and sales growth. The effect is more pronounced in a highly competitive environment and within an industry, confirming that strategic misalignment acts as a constraint to the merged company's optimal response to investment opportunities and market threats. Overall, the results reveal that synergies obtained from the overlapping strategies constitute an important determinant of public mergers and acquisitions. >more

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