NEWSLETTER of January 5, 2024

The following content has been added at finexpert:

Bain & Company
DEUTSCHLANDS BANKEN 2023: DER STEINIGE WEG ZURÜCK ZUR PROFITABILITÄT
In the year of the interest rate turnaround, the return on equity rose for the third time in a row - to 3.8 percent. However, hardly any banks are still earning their cost of equity. The sector must continue its transformation and at the same time address new topics such as artificial intelligence at an early stage. >more

Vanguard
ECONOMIC AND MARKET OUTLOOK 2024: GLOBAL SUMMARY
Higher interest rates are here to stay. This development ushers in a return to sound money, and the implications for the global economy and financial markets will be profound. For households and businesses, higher interest rates will limit borrowing, increase the cost of capital and encourage saving. For governments, higher rates will force a reassessment of fiscal outlooks sooner rather than later. Vanguard believes that a higher interest rate environment will serve investors well in achieving their long-term financial goals, but the transition may be bumpy. >more

PwC
EMISSIONSMARKT DEUTSCHLAND: TRISTESSE IM DEUTSCHEN EMISSIONSMARKT – HOFFNUNG AUF IPOS IM JAHR 2024
In late summer, it still looked as if the German issuing market could pick up speed towards the end of the year. However, hopes of a strong final quarter were not fulfilled: Not a single company ventured onto the Frankfurt Stock Exchange in the fourth quarter. It is a disappointing end to a weak IPO year in which there were only three initial listings (previous year: 4) on the Frankfurt trading floor. At 1.9 billion euros, the total volume of IPOs was also significantly lower than the previous year (9.4 billion euros), when the Porsche IPO boosted the IPO balance sheet for 2022. >more

Bain & Company
GLOBAL HEALTHCARE PRIVATE EQUITY REPORT 2024
Investors continue trying to unlock liquidity and raise capital for healthcare deals, in a challenging fund-raising environment. Biopharma deals represent the biggest share of healthcare buyouts, while new modalities and innovative therapies such as GLP-1s transform the investment landscape. As investors look to diversify their Asia-Pacific buyout activity, India is viewed as a place to deploy healthcare capital at scale. >more

PLACE YOUR BETS? THE MARKET CONSEQUENCES OF INVESTMENT RESEARCH ON REDDIT'S WALLSTREETBETS
Daniel Bradley, Jan Hanousek Jr., Russell Jame, and Zicheng Xiao
2023
We examine the consequences of due diligence recommendations on Reddit’s Wallstreetbets (WSB) platform. Before the Gamestop (GME) short squeeze, recommendations are significant predictors of returns and cash-flow news. This predictability is completely eliminated post-GME. Post-GME, the fraction of reports emphasizing price-pressure or attention-grabbing stocks dramatically increases, and the decline in informativeness is concentrated in these reports. Similarly, retail trade informativeness increases following DD reports in the pre-GME period, but not post-GME. Our findings are consistent with the view that the Gamestop event altered the culture of WSB, leading to a deterioration in investment quality that adversely impacted smaller investors. >more

THE DECLINE OF SECURED DEBT
Efraim Benmelech, Nitish Kumar, and Raghuram G. Rajan
2022
The share of secured debt issued (as a fraction of total corporate debt) declined steadily in the United States over the twentieth century. This stems partly from financial development giving creditors greater confidence that high quality borrowers will respect their claims even if creditors do not obtain security up front. Consequently, such borrowers prefer retaining financial flexibility by not giving security up front. Instead, security is given contingently – when a firm approaches distress. This also explains why superimposed on the secular decline, the share of secured debt issued is countercyclical. >more