NEWSLETTER of July 8, 2022
The following content has been added at finexpert:
Studies > Performance
Invesco
2022 MID-YEAR INVESTMENT OUTLOOK
Historic pandemic-era moves by both fiscal and monetary policymakers have reawakened inflation, and Russia’s invasion of Ukraine has exacerbated these inflationary pressures and hindered economic growth through a surge in commodity/energy prices. Markets are contending with all this just as some major central banks are tightening policy. We explore what this all might mean for investors in the second half of 2022 and beyond. >more
Studies > Alternative Investments
World Bank Group
COMMODITY MARKETS OUTLOOK: THE IMPACT OF THE WAR IN UKRAINE ON COMMODITY MARKETS
The war in Ukraine has caused major supply disruptions and led to historically higher prices for a number of commodities. Most commodity prices are now expected to see sharp increases in 2022 and remain high in the medium term. The price of Brent crude oil is projected to average $100/bbl in 2022, a 40 percent increase from 2021. Non-energy prices are expected to rise by about 20 percent in 2022, with the largest increases in commodities where Russia or Ukraine are key exporters. Wheat prices in particular are forecast to increase more than 40 percent this year. While price pressures are expected to ease in 2023, commodity prices will remain much higher than previously expected. The outlook depends on the duration of the war and the severity of disruptions to commodity flows. >more
Studies > Alternative Investments
PGIM
GLOBAL REAL ESTATE OUTLOOK 2022
The outlook for global real estate markets is clouded by elevated uncertainty, with higher inflation, geopolitical conflict, supply disruptions and rising interest rates contributing to a volatile backdrop. Real estate has been resilient to shock in recent years, but downside risks have risen, limiting tactical investment opportunities. Increasingly, the focus for investors is on assets in sectors and markets that deliver dependable cash flows and in which demand is structurally supported by favorable underlying trends. >more
Studies > Macro
World Bank Group
GLOBAL ECONOMIC PROSPECTS, JUNE 2022
The world economy continues to suffer from a series of destabilizing shocks. After more than two years of pandemic, the Russian Federation’s invasion of Ukraine and its global effects on commodity markets, supply chains, inflation, and financial conditions have steepened the slowdown in global growth. In particular, the war in Ukraine is leading to soaring prices and volatility in energy markets, with improvements in activity in energy exporters more than offset by headwinds to activity in most other economies. The invasion of Ukraine has also led to a significant increase in agricultural commodity prices, which is exacerbating food insecurity and extreme poverty in many emerging market and developing economies. Numerous risks could further derail what is now a precarious recovery. >more
Studies > Macro
Lazard
POLICY BRIEF: HOW TO MAKE SOVEREIGN DEBT RESTRUCTURING MORE EFFECTIVE
As public debt issuance has surged in recent years, so too have situations of debt distress in developing and emerging countries. Existing debt restructuring tools are not effective in handling these debt crises, however, with creditors finding it exceedingly difficult to efficiently restructure sovereign debt using today’s processes and procedures. In this policy paper, Lazard supports the case for the comparability of treatment for all creditors and makes the case for the adoption of simple, precise, transparent and equitable guidelines to enable expeditious sovereign debt restructuring. >more
Research Papers > Corporate Valuation
SURVEY: MARKET RISK PREMIUM AND RISK-FREE RATE USED FOR 95 COUNTRIES IN 2022
Pablo Fernandez, Teresa García de Santos, and Javier Fernandez Acin
2022
This paper contains the statistics of a survey about the Risk-Free Rate (RF) and the Market Risk Premium (MRP) used in 2022 for 95 countries. We got answers for 99 countries, but we only report the results for 95 countries with more than 6 answers. Many respondents use for European countries a RF higher than the yield of the 10-year Government bonds. The coefficient of variation (standard deviation / average) of RF is higher than the coefficient of variation of MRP for the Euro countries. The paper also contains the links to previous years surveys, from 2008 to 2021. >more
Research Papers > Alternative Investments
AN INVESTOR’S GUIDE TO CRYPTO
Campbell R. Harvey, Tarek Abou Zeid, Teun Draaisma, Martin Luk, Henry Neville, Andre Rzym, and Otto Van Hemert
2022
We provide practical insights for investors seeking exposure to the growing cryptocurrency space. Today, crypto is much more than just bitcoin, which historically dominated the space but accounted for just a 21% share of total crypto trading volume in 2021. We discuss a wide variety of tokens, highlighting both their functionality and their investment properties. We critically compare popular valuation methods. We contrast buy-and-hold investing with more active styles. We only deem return data from 2017 representative, but the use of intraday data boosts statistical power. Underlying crypto performance has been notoriously volatile, but volatility-targeting methods are effective at controlling risk, and trend-following strategies have performed well. Crypto assets display a low correlation with traditional risky assets in normal times, but the correlation also rises in the left tail of these risky assets. Finally, we detail important custody and regulatory considerations for institutional investors. >more