NEWSLETTER of March 28, 2024

The following content has been added at finexpert:

AFME | zeb
DIE ROLLE DER KAPITALMÄRKTE IN DEUTSCHLAND
The Association for Financial Markets in Europe (AFME) has published a new study on the role of capital markets in Germany. The study, which was published in collaboration with zeb, highlights the potential of a stronger role for capital markets in the German financial system. The German financial system continues to be characterized by the importance of banks; the significance of the capital markets in Germany therefore lags behind other countries - both for companies and private households. >more

KfW Research
KFW-KREDITMARKT­AUSBLICK: MÄRZ 2024
The new lending business of German banks and savings banks with companies and the self-employed, as calculated by KfW Research, has bottomed out: As the current KfW Credit Market Outlook shows, the decline in new business slowed to -12.5% in the fourth quarter of 2023 compared to the previous year, after a considerable -15.7% in the third quarter. In the current first quarter of 2024, KfW Research expects a further significant slowdown in the decline and a recovery over the course of the year. >more

Neuberger Berman
PRIVATE MARKETS Q4 2023 PRELIMINARY VALUATION SUMMARY AND ANALYSIS
For Q4 2023, based on preliminary analysis, NB Private Markets currently anticipates that buyout funds will increase in value by an average of 5.0% in USD while venture capital funds will increase in value by 4.2% on average. Furthermore, we see that 86% of buyout funds experienced positive NAV growth in Q4 with 75% of funds increasing in value between 0-10% during the quarter. For calendar year 2023, preliminary reporting indicates that buyout funds and venture capital funds increased in value by an average of 10.2% and 3.3%, respectively. >more

Bank for International Settlements
BIS QUARTERLY REVIEW: MARCH 2024
The central theme of the review period was the waxing and waning of financial markets' optimistic expectations over the policy outlook. Until late December, financial conditions continued to ease, driven by investors anticipating looser policy in the near term. Since January, financial conditions firmed and tightened, as central bank communication pushed back against such expectations and data releases pointed at more stubborn inflation pressures. Sovereign bond yields declined on balance during the period, while valuations of risky assets generally rose. Supported by resilient risk sentiment, emerging market economies (EMEs) experienced bond inflows, and (except China) their stock markets extended gains. >more

TRADE CREDIT AND THE STABILITY OF SUPPLY CHAINS
Nuri Ersahin, Mariassunta Giannetti, and Ruidi Huang
2024
We show that trade credit flows increase when a firm in a production network becomes a less reliable supplier due to an operating shock. Affected firms extend more trade credit when their customers have lower switching costs or expect more disruption. Suppliers that are more dependent on the affected firms facilitate the trade credit extension. However, when financial constraints at the affected firms and their suppliers prevent the increase in trade credit, customers sever their relationships with the affected firms, and the sales of the affected firms and their suppliers drop, suggesting that trade credit enhances production network stability. >more

SUSTAINABILITY OR PERFORMANCE? RATINGS AND FUND MANAGERS’ INCENTIVES
Nickolay Gantchev, Mariassunta Giannetti, and Rachel Li
2024
We explore how mutual fund managers and investors react when the tradeoff between a fund’s sustainability and performance becomes salient. Following the introduction of Morningstar’s sustainability ratings (the “globe” ratings), mutual funds increased their holdings of sustainable stocks to attract flows. Such sustainability-driven trades, however, underperformed, impairing the funds’ overall performance. Consequently, a tradeoff between sustainability and performance emerged. In the new equilibrium, the globe ratings do not affect investor flows and funds no longer trade to improve their globe ratings. >more