NEWSLETTER of January 28, 2022

The following content has been added at finexpert:

We updated the capital market data

(Multiples, Betas and Returns) as to January 15, 2022 >more

Bain & Company
DEUTSCHLANDS BANKEN 2021: WIE DIE RENDITEWENDE GELINGT
The seventh Bain analysis on the development of the German banking industry shows that falling costs and stable earnings saved banks from the red in the pandemic year 2020. At 1.1 percent, return on equity was slightly above the previous year's level for the first time in many years. Despite progress in realignment, however, this has remained inadequate at many groups of institutions. >more

BlackRock
2022 PRIVATE MARKETS OUTLOOK
As investors navigate an unprecedented market regime, we see private market investments as well suited to the task. We believe Covid-accelerated megatrends will benefit investments of this vintage across asset classes, with robust competition for assets making deal sourcing and selection increasingly important. >more

S&P Dow Jones Indices
FACTOR INDICES: A SIMPLE COMPENDIUM
Factor indices can help the clients of specialist managers disentangle how much of the manager’s performance is attributable simply to factor exposure, and how much is attributable to the manager’s stock selection beyond the factor.  Like their first-generation counterparts, factor indices can be used as both benchmarks and investment vehicles.  In the latter use, we can speak of “indicizing” a factor or set of factors—i.e., delivering in passive form a strategy formerly available only via active management. >more

BNP Paribas
INVESTMENT OUTLOOK 2022
In our 2022 Investment Outlook, we seek to help investors to navigate the rapids as the global economy stabilises during the next phases of the economic recovery. We also consider the possible broader consequences for macroeconomic policy as the world tackles the social and economic challenges laid bare by the pandemic. >more

PwC
TRANSPORT & LOGISTICS BAROMETER: 2021 FULL-YEAR ANALYSIS
Emerging from the Corona crisis with record M&A year: Global deal activity in the transportation and logistics industry reached an all-time high in 2021. More than twice as many megadeals compared to previous year were announced. In addition, 2021 was the year of strategic investors. >more

MARKET EFFICIENCY IN THE AGE OF MACHINE LEARNING
Leonidas G. Barbopoulos, Rui Dai, Tālis J. Putniņš, and Anthony Saunders
2021
As machines replace humans in financial markets, how is informational efficiency impacted? We shed light on this issue by exploiting a unique data-set that allows us to identify when machines access important company information (8-K filings) versus when humans access the same information. We find that increased information access by cloud computing services significantly improves informational efficiency and reduces the price drift following information events. We address identification through exogenous power and cloud outages, a quasi-natural experiment, and instrumental variables. We show that machines are better able to handle linguistically complex filings, less susceptible to bias from negative sentiment and less constrained in attention/processing capacity than humans. >more

THE COST OF ESG INVESTING
Laura Anne Lindsey, Seth Pruitt, and Christoph Schiller
2021
Even against increasing interest in socially responsible investing mandates, we find that implementing ESG strategies can cost nothing. Modifying optimal portfolio weights to achieve an ESG-investing tilt negligibly affects portfolio performance across a broad range of ESG measures and thresholds. This is because those ESG measures do not provide information about future stock performance, either in relation to risk or mispricing, beyond what is provided by other observable firm characteristics. That the stock market does not reflect significant equilibrium pricing of ESG information is rationalized in a model of responsible investing wherein investors differ in which ESG-related criteria are used to weight their portfolios. >more