NEWSLETTER of June 28, 2024

The following content has been added at finexpert:

EY
GENERATIVE AI IN INSURANCE
Recent research from EY-Parthenon teams outline insurers’ baseline priorities and ambitions for GenAI. Specifically, it reveals how industry decision-makers around the world view the opportunities and challenges associated with GenAI, and how they are operationalizing GenAI within their organizations. EY study also clarifies the value in taking a dual-track approach. One that promotes both rapid, bottom-up experimentation to define viable use cases for the near term and the methodical development of an enterprise-wide GenAI vision with the necessary infrastructure, governance and capabilities to execute it over the long term. >more

Quirin Privatbank
FINANZIERUNGSMONITOR KAPITALMARKT: KAPITALERHÖHUNGEN FÜR FÜNF MILLIARDEN EURO IN 2023
 A study on capital market activities revealed that there were a total of 60 capital increases through share issues with a total volume of five billion euros in 2023. With the exception of two measures, these were mainly small-scale measures. Against a backdrop of great uncertainty on the stock market, anchor investors were in demand with a third of the measures being characterized by a backstop investor. You can read the exact figures and many other findings in the Capital Market 2023 Financing Monitor by Quirin Privatbank. >more

Deutsche Bank Research
OPTIMISMUS MIT UNGEWISSHEIT
The first half of 2024 will soon be over and the outlook for the global economy is comparatively favorable. A soft landing is generally expected for the US, especially as the economy has remained impressively robust despite the rapid interest rate hikes in 2022 and 2023. Following a significant hike in January, our US growth forecasts for the next two years are at the upper end of the consensus estimates (2024: 2.4%; 2025: 2.2%). This resilience is also impacting Europe to a certain extent, which is emerging from the stagnation of recent years thanks to exports. We have therefore raised our growth forecast for 2024 by half a percentage point to 0.9%. There are also signs of a recovery in Germany. However, the recovery is likely to be slow and the investment outlook remains gloomy. >more

Institut der Deutschen Wirtschaft
UNTERNEHMERISCHES SELBSTVERSTÄNDNIS VON SELBSTSTÄNDIGEN IN DEUTSCHLAND
The number of (solo) self-employed persons is on a downward trend, as is the number of people entering self-employment. In the case of the latter, it can also be observed that in the recent past this has increasingly been done by people who are already retired, while changes from dependent employment have become rarer. This indicates that self-employment has become less attractive as a form of employment than salaried employment. The public debate on self-employment is of little help here. It tends to focus more on aspects of labor and social law, which would go hand in hand with greater regulation of solo self-employed workers in particular. >more

Kiel Institut für Weltwirtschaft
DEUTSCHE WIRTSCHAFT IM SOMMER 2024: ERHOLUNG KOMMT MÜHSAM IN GANG
The German economy is leaving the recession behind. According to leading indicators, gross domestic product will continue to rise following the increase in the first quarter. Over the course of the year, rising real disposable income and the upturn in foreign business will stimulate economic activity. In addition, the effect of tighter monetary policy on expansionary forces will gradually diminish. However, there are no signs of strong economic momentum. Despite an upward trend, the business and consumer climate remains at a low level. In addition, the scope for expansion is being increasingly limited by structural obstacles - not least demographic change. All in all, gross domestic product is likely to increase by 0.2% in the current year (spring forecast: 0.1%) and by 1.1% in 2025 (spring forecast: 1.2%). >more

FROM COMPETITORS TO PARTNERS: BANKS' VENTURE INVESTMENTS IN FINTECH
Manju Puri, Yiming Qian, and Xiang Zheng
2024
We hypothesize and find evidence that banks use venture investments in fintech startups as a strategic approach to navigate fintech competition. We first document that banks' venture investments have increasingly focused on fintech firms. We find that banks facing greater fintech competition are more likely to make venture investments in fintech startups. Banks target fintech firms that exhibit higher levels of asset complementarities with their own business. Finally, instrumental variable analyses show that venture investments increase the likelihood of operational collaborations and knowledge transfer between the investing bank and the fintech investee. >more

ESG SKILL OF MUTUAL FUND MANAGERS
Marco Ceccarelli, Richard B. Evans, Simon Glossner, Mikael Homanen, and Ellie Luu
2024
We propose a new measure of ESG-specific skill based on fund manager trades and ESG rating changes. We differentiate between proactive ESG managers, whose trades predict future changes in ESG ratings, reactive ESG managers, who change their portfolio allocation after a change in ESG ratings occurs, and non-ESG managers. The predictive ability of proactive managers is persistent in out-of-sample tests, consistent with manager skill. For identification, we rely on an exogenous methodology change of one ESG rating provider that redefined ESG ratings levels without releasing new information. Reactive managers significantly change their holdings in firms whose ESG ratings exogenously change, consistent with a lack of ESG skill. Proactive managers do not trade in the direction of the change, consistent with their trading no new ESG information. This ESG skill has economic implications: Investors in mutual funds with an explicit sustainability mandate reward proactive managers with 58bps higher average quarterly flows. >more