NEWSLETTER of January 24, 2025

The following content has been added at finexpert:

We updated the capital market data

(Multiples, Betas and Returns) as to January 15, 2025 >more

PwC
PWC’S 28TH ANNUAL GLOBAL CEO SURVEY: REINVENTION ON THE EDGE OF TOMORROW
‘The future is already here—it’s just not evenly distributed,’ said speculative fiction author William Gibson. This sentiment echoes through the results of PwC’s 28th Annual Global CEO Survey, based on responses from 4,701 chief executives representing every region of the world economy. Some CEOs are moving rapidly to capture the growth and value-creation potential inherent in the defining forces of our era. They’re investing in generative AI, addressing the opportunities and threats posed by climate change, and reinventing their operations and business models to create value in new ways. Yet many others are moving slowly, constrained by leadership mindsets and processes that lead to inertia.  >more

Robeco
EUROPEAN EQUITY - IT’S ALWAYS DARKEST BEFORE THE DAWN
If fairy tales are to be believed, then European equities have long been one of the ugly sisters to the Cinderella that is US stocks. Underperforming their American counterparts for years, European stocks have not enjoyed the more positive economic momentum that has underpinned growth over the pond. But the European story may at last have a happy ending. >more

KfW Research
MITTELSTÄNDISCHE UNTERNEHMEN MIT GESCHÄFTSMODELL­INNOVATIONEN AKTIVER BEI DIGITALISIERUNG UND KLIMASCHUTZINVESTITIONEN
The key finding of the study is that business model innovations are closely linked to digitalization and climate protection investments. In particular, companies with comprehensive business model innovations often carry out both climate protection and digitalization projects. In many cases, digitalization is likely to be the starting point for business model innovations. Business model innovations aimed at sustainability can increase the competitive position of companies, but can also be associated with economic disadvantages for the companies concerned. >more

KfW Research
REKORDANTEIL DER MITTELSTÄNDLER BEKLAGT KREDITRESTRIKTIONEN
SMEs in Germany are finding it increasingly difficult to obtain loans. In the fourth quarter of 2024, 32% of SMEs that were interested in taking out a loan complained that banks were being restrictive. This is the highest level since the new survey methodology was introduced in 2017. Three months ago, a record proportion of large companies in Germany had already reported difficult loan negotiations. This rate fell again slightly in the fourth quarter by 2.6 percentage points to 31.9%. These are the results of the KfW-ifo credit hurdle. KfW analyzes data from the ifo Institute's economic surveys every quarter, broken down by size class and economic sector. >more

SHORT SQUEEZES AFTER SHORT-SELLING ATTACKS
Lorien Stice-Lawrence, Yu Ting Forester Wong, and Wuyang Zhao
2024
We estimate the prevalence and drivers of short squeezes after short-selling attacks. Positive returns after attacks have a disproportionate tendency to fully reverse and are accompanied by heightened short covering, consistent with the presence of short squeezes. We assess and find no support for non-squeeze drivers of these positive return reversals and show they are more likely to be accompanied by squeeze-related news articles, increased stock volatility, and disruptions in the stock lending market. Using positive return reversals as a proxy for short squeezes, we estimate that 15% of short attacks experience squeezes, and squeeze risk increases with short sellers’ visibility but decreases with the credibility of their evidence. Additionally, squeezes appear to be precipitated by actions of firms and investors, including insider purchases, share recalls, retail investor trading, and firm disclosures. Our findings quantify a material risk and check on activist short selling and are especially timely given recent proposed short-selling restrictions. >more

LOAN MARKET BENEFITS OF (HIGH) IPO UNDERPRICING
Xunhua Su, Donghang Zhang, and Xiaoyu Zhang
2024
We provide novel evidence on the loan market benefits of high IPO underpricing. We show that greater underpricing is associated with a significantly larger within-firm reduction of post-IPO borrowing costs. This benefit of underpricing is less pronounced for firms with high ex-ante information asymmetry and is concentrated in firms with a high demand for advertisements. In addition, neither price revision before the IPO nor the short-term or long-term stock return after the IPO has a similar effect. Our results are supportive that underpricing affects borrowing costs through an attention channel and highlight a real economic effect of underpricing from the loan market. >more