NEWSLETTER of May 31, 2024

The following content has been added at finexpert:

Bitkom Research
DIGITAL FINANCE – WIE DIGITAL IST DEUTSCHLANDS FINANZWESEN?
Online banking is more widespread in Germany than ever before: for the first time, the majority of senior citizens (54%) are using their bank's online services. In the previous year, the figure was 45 percent. Usage is also high among younger people: 92% of 30 to 49-year-olds and 94% of 16 to 29-year-olds regularly access their online banking services. These are the results of a representative Bitkom survey of 1,004 people in Germany aged 16 and over. >more

S&P Dow Jones Indices
ETFS IN INSURANCE GENERAL ACCOUNTS – 2024
In 2023, U.S. insurers held USD 34.4 billion in exchange-traded funds (ETFs).  For the second year in a row, we saw large outflows from large insurers.  In 2022, the bear market exacerbated the outflows to decrease AUM by 23%.  In 2023, the market acted against the outflows and AUM only decreased by 6%. One company selling fixed income ETFs accounted for 50% of the outflows.  These outflows accounted for most of the fixed income outflows.  A more diversified set of companies selling equities accounted for the other half of the outflows.  The combined outflows over 2022 and 2023 has altered the profile of ETF holdings by insurers.  In our ninth annual study of ETF usage by U.S. insurance general accounts, we review ETF usage across various types of companies and across different asset classes.  We also analyze how trading patterns have varied over the years. >more

KfW Research
ZINSWENDE MIT ÜBERSCHAUBAREM ZUSATZEFFEKT AUF DIE INVESTITIONEN IM MITTELSTAND
The announcements by the European Central Bank indicate that the current tight monetary policy is likely to be eased in the near future. The then more favorable financing conditions have the potential to give investment activity in the SME sector an (at least slight) boost in 2024. This is shown by a special survey conducted by the KfW SME Panel in mid-April 2024. Around 5 to 6% of SMEs are very likely to expand their investments beyond the level planned for 2024 in the event of a key interest rate cut. In addition, there are those companies that have already planned investments but are still on hold due to the current discussion about implementation. Companies' transformation efforts are likely to benefit from this. This is because investment impetus is expected in the areas of digitalization, climate protection and/or energy efficiency in particular. >more

ZEW – Leibniz-Zentrum für Europäische Wirtschaftsforschung
UNTERNEHMENSSCHLIEßUNGEN 2023 – STARKER ANSTIEG DER SCHLIEßUNGSZAHLEN IM VERARBEITENDEN GEWERBE
Empty shop windows and deserted stores are on the increase - more and more businesses are closing and leaving the market. But it's not just retailers, consumer-related service providers and restaurants that are having to give up. The construction and manufacturing industries are also seeing a significant increase in the number of closures. A recent analysis by ZEW Mannheim in collaboration with Creditreform shows how much the industrial base in the German SME sector is shrinking. >more

STRATEGIC BORROWING FROM PASSIVE INVESTORS
Darius Palia, and Stanislav Sokolinski
2023
We find that short-sellers manage risks by strategically borrowing shares in stocks with significant ownership by passive investors. This practice increases securities lending demand for stocks with substantial passive ownership, resulting in improved price efficiency, higher lending fees, and increased short interest in these stocks. Consistent with the risk mitigation motive, these stocks show reduced risks of unexpected fee hikes and loan recall, longer loan durations, and attract more informed short-sellers. These effects are particularly pronounced in hard-to-borrow stocks where short-sale constraints are binding. Our study suggests that passive investing helps alleviate short-sale constraints by reducing the risks associated with stock borrowing. >more

DO INVESTORS CARE ABOUT BIODIVERSITY?
Alexandre Garel, Arthur Romec, Zacharias Sautner, and Alexander F. Wagner
2024
This paper introduces a new measure of a firm's negative impact on biodiversity, the corporate biodiversity footprint, and studies whether it is priced in an international sample of stocks. On average, the corporate biodiversity footprint does not explain the cross-section of returns between 2019 and 2022. However, a biodiversity footprint premium (higher returns for firms with larger footprints) began emerging in October 2021 after the Kunming Declaration, which capped the first part of the UN Biodiversity Conference (COP15). Consistent with this finding, stocks with large footprints lost value in the days after the Kunming Declaration. The launch of the Taskforce for Nature-related Financial Disclosures (TNFD) in June 2021 had a similar effect. These results indicate that investors have started to require a risk premium upon the prospect of, and uncertainty about, future regulation or litigation to preserve biodiversity. >more