NEWSLETTER of May 3, 2024

The following content has been added at finexpert:

We updated the capital market data

(Multiples, Betas and Returns) as to April 15, 2024 >more

Deutsche Bank Research
DEUTSCHLAND-MONITOR BAUFINANZIERUNG Q2/2024
Following the 0.3% decline in German GDP in 2023, we expect a further drop of 0.2% in 2024. The economy is likely to have contracted again in Q1. However, we expect household consumption to rise over the course of the year thanks to decent real wage growth. 5-10 year mortgage rates are likely to be at 3.8% at the end of 2024 and we expect a slump in new construction. Only 212,000 homes are likely to be completed in 2024. Despite the interest rate shock, affordability in 2023 remained better than before the boom. It fell in Q1 2024 due to the first substantial fall in interest rates after the interest rate shock. >more

Deloitte
2024 CENTRAL EUROPE CFO SURVEY
The CFO Confidence Index, which reflects CFOs’ levels of optimism, has increased in positivity to 17% from a low point of -15% in 2023. This assessment was most influenced by the Business Environment Confidence Index, which, in stark contrast to previous years, was exceptionally high. CFOs are slightly more optimistic about GDP growth than they were a year ago. The average anticipated GDP growth in Central Europe for 2024 is 1.1%, compared to 0.33% in 2023 and 2.3% in 2022. About 60% of the CFOs, up from 50% in 2023, estimate that GDP will grow by 0.5%. >more

Deutsche Bank Research
PREISEINBRUCH ODER DELLE AM DEUTSCHEN WOHNUNGSMARKT? ANALYSE UNTERSCHIEDLICHER PREISINDIZES
German house prices have undoubtedly fallen in 2023. However, it is surprisingly unclear how much. Different price indices paint a different picture. Here we go into some detail to assess the accuracy of the main indices in capturing the recent downturn, both for metropolitan areas and at a national level. Hedonic regressions are used to separate price changes from quality changes. The data basis is of central importance here. Our analysis shows that mortgage data is probably the most reliable way of mapping significant quality changes. >more

Allianz Research
GLOBAL OUTLOOK FOR PRIVATE DEBT & PRIVATE EQUITY
High inflation and escalating interest rates have tempered enthusiasm in private markets. These factors induced investor caution and lowered return expectations last year, breaking a decade-long asset class growth (~13% AUM yearly). Despite this, private assets remain attractive to institutional and retail investors seeking higher yields, inflation hedging, reduced market volatility and diversification. The persistence of relatively higher long-term interest rates, combined with stronger-than-anticipated corporate earnings, is expected to maintain interest in private asset segments, such as private debt, among a diverse investor base. >more

KPMG
VENTURE PULSE Q1 2024
Global VC investment dropped in Q1’24, despite four $1 billion+ megadeals. The total number of VC deals globally also declined quarter-over-quarter, particularly Series D+ rounds. Ongoing market challenges — including the lack of exits, high interest rates, and continued geopolitical uncertainties — kept VC investors cautious during Q1’24. In addition to scrutinizing potential deals more heavily, VC investors also showed less willingness to provide bridge funding to their existing portfolio companies, driving startups to increase their focus on cost cutting and achieving profitability. >more

PORTFOLIO PUMPING IN MUTUAL FUND FAMILIES
Pingle Wang
2024
This paper investigates portfolio pumping at the fund family level, where non-star fund managers strategically purchase stocks held by star funds in the family to inflate their quarter-end performance. Star funds that engage in such activities show inflated performance after 2002 when the Securities and Exchange Commission increased regulation on portfolio pumping. Stocks pumped by the strategy show strong reversals at the quarter end. Moreover, despite a minor underperformance stemming from portfolio misallocation, non-star fund managers pumping for star funds receive abnormally high subsequent flows, suggesting a pattern of family subsidization. >more

CHATGPT AND CORPORATE POLICIES
Manish Jha, Jialin Qian, Michael Weber, and Baozhong Yang
2024
We create a firm-level ChatGPT investment score, based on conference calls, that measures managers' anticipated changes in capital expenditures. We validate the score with interpretable textual content and its strong correlation with CFO survey responses. The investment score predicts future capital expenditure for up to nine quarters, controlling for Tobin's q and other determinants, implying the investment score provides incremental information about firms' future investment opportunities. The investment score also separately forecasts future total, intangible, and R&D investments. High-investment-score firms experience significant negative future abnormal returns. We demonstrate ChatGPT's applicability to measure other policies, such as dividends and employment. >more